Lily Products Company is considering an investment in one of two new product lines. The investment required for either product line is $540,000. The net cash flows associated with each product are as follows: Year   Liquid Soap   Body Lotion 1   $170,000      $ 90,000      2 150,000    90,000      3 120,000    90,000      4 100,000    90,000      5 70,000    90,000      6 40,000    90,000      7 40,000    90,000      8 30,000    90,000      Total $720,000    $720,000      a.  Recommend a product offering to Lily Products Company, based on the cash payback period for each product line.   Payback period for liquid soap   Payback period for body lotion   b.  The project with the ?  net cash flows in the early years of the project life will be favored over the one with the ? net cash flows in the initial years

Cash payback period for a service company Haukea Clothing Inc. is evaluating two capital investment proposals for a retail outlet, each requiring an investment of $140,000 and each with an eight-year life and expected total net cash flows of $280,000. Location 1 is expected to provide equal annual net cash flows of $35,000, and Location 2 is expected to have the following unequal annual net cash flows: Year Amount Year Amount Year 1 $63,000 Year 5 $34,000 Year 2 48,000 Year 6 25,000 Year 3 29,000 Year 7 20,000 Year 4 45,000 Year 8 16,000 Determine the cash payback period for both location proposals. Location Year Location 1    years Location 2    years

Using the following information find the project's cash flow.  Once you have that information find the NPV, PI and IRR.   Cost of new equipt     7,800,000     Installation costs     200,000                 Unit Sales Year Units sold         1             80,000         2           130,000         3           140,000         4             90,000         5             70,000                   Sales price per unit $300 in years 1-4, $250 in year 5     Variable cost per unit $225/unit         Annual fixed costs $225,000 in years 1-5                   Working capital requirements: Initial working capital requirement $100,000     Each year net working capital equal to 10% of the year's sales   All working capital terminated at the end of year 5               Depreciation Bonus depreciation method - all is taken in year 1   Income tax rate 21%         Required rate of return 12%

f

Cash Payback Period, Net Present Value Analysis, and Qualitative Considerations The plant manager of Shenzhen Electronics Company is considering the purchase of new automated assembly equipment. The new equipment will cost $72,000. The manager believes that the new investment will result in direct labor savings of $18,000 per year for 10 years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 a.  What is the payback period on this project?fill in the blank 1 years b.  What is the net present value, assuming a 12% rate of return? Use the table provided above. Round to the nearest whole dollar. Net present value…

NPV and IRR The first two scenarios are independent. All cash flows are after-tax cash flows. The present value tables provided in Exhibit 19B.1 and Exhibit 19B.2 must be used to solve the following problems. Required: 1. Patz Corporation is considering the purchase of a computer-aided manufacturing system. The cash benefits will be $800,000 per year. The system costs $4,000,000 and will last eight years. Compute the NPV assuming a discount rate of 10 percent. Should the company buy the new system? Yes 2. Amy Wetzel has just invested $270,000 in a restaurant specializing in German food. She expects to receive $43,470 per year for the next eight years. Her cost of capital is 5.5 percent. Compute the internal rate of return. Enter your answer as a whole percentage value (for example, 16% should be entered as "16" in the answer box). X % Did Amy make a good decision? Yes 3. For each of the previous two requirements, choose the data analytic type that applies and explain why (descriptive,…