Initial Investment is 90,000 for Machine A, 85000 for Machine B, 100000 for Machine C. Estimated life is 6 years for all the machines. Scrap Value: Machine A, B, C: 6000 Year Machine A Machine B Machine C 1 24000 8000 15000 2 32000 24000 24000 3 40000 32000 31000 4 24000 48000 37000 16000 32000 40000 6. 18000 35000 25000 Calculate NPV at discounting factors 10% and 8%. And suggest which machine is

a- At 10%, find PW for the following Table Warehouse cost equipment cost Installation cost Annual maintenance costs Annual Revenues Salvage Machine life 0 1 2 3 -90,000 b- A project with an IRR = 20%, it has the following NCF (S) X X 4000 (SUS) 50,000 46.000 Find X? 6,500 8,000 45,000 15,000 15 years

Q1: For the machines indicated below. Consider i= 10% per year First cost Annual cost Salvage value Life duration Machine A 20,000 $ 5,000 $ 7,500 $ 3 Machine B 25,000 4,000 6,000 4 A- Draw cash flow diagram for each machine for one cycle of each project B- Draw cash flow diagram for each project considering the LCM life cycle (Hint: different project duration, need to have the LCM life cycle) C- Compare the machines to select best alternative one based on Present worth analysis method D- Repeat part B considering Future worth analysis

A company is considering buying a new machine. Specific details:                                   Initial Investment $400,000                                         Annual Cash Revenues $375,000                                         Annual Cash Expense $262,000                                         Expected Life 5 Years                                       Salvage Value $0                                         Discount Rate 10%                                         All cash flows are after tax.                                                             1 Prepare a schedule that shows the applicable cash flows and other relevant items for this decision                         2 Compute the payback period for the new machine                                   3 Compute the Accounting Rate of Return (ARR) for the new machine