Green Energy Co. (GEC), an environmental energy company, is looking to purchase a new methane burning furnace, and wants to evaluate two different models that both have a useful life of 5 years. GEC requires a 12 percent return on investment. Assume cash flows noted below are net of tax. The cash flows associated with the two models are as follows:   Year Model A Model B Initial Cost (Cash outflow) 0 -$340,000 -$175,000 Cash Flow Year 1 1 $165,000 $65,000 Cash Flow Year 2 2 $120,000 $60,000 Cash Flow Year 3 3 $90,000 $40,000 Cash Flow Year 4 4 $60,000 $35,000 Cash Flow Year 5 5 $30,000 $40,000 Calculate on excel:  If you apply the payback criterion, which investment should GEC choose? Why?  If you apply the NPV criterion, which investment should GEC choose? Why?  If you apply the IRR criterion, which investment should GEC choose? Why?

Ronnie's Coffee House is considering a project which will produce sales of $6,000 and increase cash expenses by $2,500. If the project is implemented, taxes will increase by $1,300. The additional depreciation expense will be $1,000. An initial cash outlay of $2,000 is required for net working capital. What is the amount of the operating cash flow using the top - down approach? Question 23 Select one: a. $4,200 b. $3,500 c. $2,200 d. $1,500 e. $200

Click here to read the eBook: Analysis of an Expansion Project PROJECT CASH FLOW Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The financial staff has collected the following information on the project: Sales revenues $5 million Operating costs (excluding depreciation) 3.5 million Depreciation 1 million Interest expense 1 million The company has a 40% tax rate, and its WACC is 11%. Write out your answers completely. For example, 13 million should be entered as 13,000,000. What is the project's cash flow for the first year (t = 1)? Round your answer to the nearest dollar.$????? If this project would cannibalize other projects by $0.5 million of cash flow before taxes per year, how would this change your answer to part a? Round your answer to the nearest dollar.The firm's project's cash flow would now be $ .??? Ignore part b. If the tax rate dropped to 35%, how would that change your answer to part a? Round…

Salsa Company is considering an investment in technology to improve its operations. The investment costs $241,000 and will yield the following net cash flows. Management requires a 10% return on investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Year Net cash Flow 1 $ 48, 200 2 53,900 3 76, 400 4 95,500 5 126,500 Required: Determine the payback period for this investment. Determine the break - even time for this investment. Determine the net present value for this investment. Should management invest in this project based on net present value?