Pitt Company is considering two alternative investments. The company requires a 12% return from its investments. Neither option has a salvage value.   Project X Project Y Initial investment $254,976 $176,440 Net cash flows anticipated:     Year 1 82,000 36,000 Year 2 60,000 56,000 Year 3 91,000 72,000 Year 4 81,000 67,000 Year 5 77,000 26,000 A. Compute the IRR for both projects using the IRR spreadsheet function. Project X fill in the blank 1% Project Y fill in the blank 2% B. Which project should be recommended. Project X

[The following information applies to the questions displayed below.} Project Y requires a $313,500 investment for new machinery with a four-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Project Y $ 380,000 170, 240 78, 375 27,000 $ 104,385 3. Compute Project Y's accounting rate of return. Project Y Numerator: Accounting Rate of Return Denominator: Accounting Rate of Return 0

Genoa Company is considering a new investment whose data are shown below.  The equipment would be depreciated on a straight-line basis over the project's 3-year life, would have a zero salvage value, and would require additional net operating working capital that would be recovered at the end of the project's life.  Revenues and other operating costs are expected to be constant over the project's life.  What is the project's NPV? WACC 14.57% Net investment in fixed assets (basis) $75,000 Required net operating working capital $33,000 Straight-line depreciation rate 33.333% Annual sales revenues $81,000 Annual operating costs (excl. depr.) $35,000 Tax rate 35.0%     $3,018     $2,974     $3,009     $2,712     $2,823.05

The following information relates to three possible capital expenditure projects. Because of capital rationing only one project can be accepted.   Project A  Project B  Project C Initial Cost      240,000.00     260,000.00     200,000.00 Expected life  5 5 4 Scrap value expected        10,000.00       15,000.00       10,000.00 Expected Cash Inflows:       End Year 1        85,000.00       95,000.00       45,000.00 End Year 2        70,000.00       70,000.00       65,000.00 End Year 3       65,000.00       55,000.00       95,000.00 End Year 4       60,000.00       50,000.00     100,000.00 End Year 5       50,000.00       50,000.00   The company estimates cost of capital is 18%. The table below shows the present value of $1 at 14%, 18% and 22%. Periods  14% 18% 22% 1 0.877 0.847 0.820 2 0.769 0.718 0.672 3 0.675 0.609 0.551 4 0.592 0.516 0.451 5 0.519 0.437 0.370 6 0.456 0.370 0.303 Required: Calculate:(b) The accounting rate of return for each…

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Required information [The following information applies to the questions displayed below.] Project Y requires a $331,500 investment for new machinery with a five-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1. EV of $1. PVA of $1. and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Annual Amounts Sales of new product Expenses Project Y Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income 3. Compute Project Y's accounting rate of return. Numerator: Accounting Rate of Return Denominator: Project Y $ 400,000 179,200 66,300 29,000 $ 125,500 Accounting Rate of Return

Iggy Company is considering three capital expenditure projects. Relevant data for the projects are as follows. Project Investment AnnualIncome Life ofProject 22A $243,600 $17,130 6 years 23A 271,500 20,700 9 years 24A 280,600 15,700 7 years Annual income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. Iggy Company uses the straight-line method of depreciation.(a) Determine the internal rate of return for each project. (Round answers 0 decimal places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Project Internal Rate ofReturn 22A  % 23A  % 24A  % If Iggy Company’s required rate of return is 11%, which projects are acceptable?

Garcìa Co. can invest in one of two alternative projects. Project Y requires a $360,000 initial investment for new machinery with a four-year life and no salvage value. Project Z requires a $360,000 initial investment for new machinery with a three-year life and no salvage value. The two projects yield the following annual results. Cash flows occur evenly within each year.    Required 1. Compute each project's annual net cash flows. 2. Compute each project's payback period. If the company bases investment decisions solely on payback period, which project will it choose? 3. Compute each project's accounting rate of return. If the company bases investment decisions solely on accounting rate of return, which project will it choose? 4. Compute each project's net present value using 8% as the discount rate. If the company bases investment decisions solely on net present value, which project will it choose?

ZLX is evaluating an investment and has generated the following: Initial investment at time t=0 is $2,000,000 Life of project is 8 years Initial investment depreciated to $0 via straight-line over entire life NWC investment required = $0.00 Expected market salvage value of investment assets = $0.00 Starting 1-year from today, and remaining constant over project life: Incremental sales as a result of investment = $1,600,000 / year Incremental expenses as a result of investment = $1,100,000 / year firm' tax rate = 28% What is the IRR of this investment? Enter rate in decimal form, rounded to fourth digit, as in "0.1234"