If the hurdle rate is 10%, what is the approximate net present value? Ignore income taxes.
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- Jullo Company is considering the purchase of a new bubble packaging machine. If the machine will provide $20,000 annual savings for 10 years and can be sold for $50,000 at the end of the period, what is the present value of the machine investment at a 9% interest rate with savings realized at year end?QUESTION 1 Malone Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $46160. The equipment will have an initial cost of $154060 and have a 5-year life. The salvage value of the equipment is estimated to be $22500. Factors to use for n=5, 1 =10% (DO NOT USE ANY OTHER FACTORS OR EQUATIONS) Present Value of an Annuity of $1 3.7908 Present Value of $1 0.6209 Future Value of an Annuity of $1 6.1051 Future Value of $1 1.6105 If the hurdle rate is 10%, what is the approximate net present value? Ignore income taxes.Malone Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $24330. The equipment will have an initial cost of $154350 and have a 5-year life. The salvage value of the equipment is estimated to be $21260 Factors to use for n-5.1-8% (DO NOT USE ANY OTHER FACTORS OR EQUATIONS) Future Value of an Annuity of $1 5.8666 Future Value of $1 1,4693 3.9927 0.6806 Present Value of an Annuity of $1 Present Value of $1 If the hurdle rate is 8%, what is the approximate not present value? Ignore income taxes
- Nelson Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $105,000. The equipment will have an initial cost of $420,000 and have a 5 year life. If the salvage value of the equipment is estimated to be $80,000, what is the payback period? Ignore income taxes. Multiple Choice 3.24 years 4.00 years 4.76 years 7.00 yearsQUESTION 3 Warren Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $47600. The equipment will have an initial cost of $170000 and have an 8 year life and no salvage value of the equipment. What is the payback period? Round your answer 2 decimalsNelson Corporation is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net cash flow of $147750. The equipment will have an initial cost of $500,000 and have a 5-year useful life, if the salvage value of the equipment is estimated to be $130,000, what is the accounting rate of return? Multiple Choice O 12.25% 14.75% 29.55% 31.22%
- Question 1. The management of Fine Electronics Company is considering to purchase an equipment to be attached with the main manufacturing machine. The equipment will cost Gh¢6,000 and will increase annual cash inflow by Gh¢2,200. The useful life of the equipment is 6 years. After 6 years it will have no salvage value. The management wants a 20% return on all investments. a. Compute net present value (NPV) of this investment project. b. Should the equipment be purchased according to NPV analysis?Homer Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net Income after tax of $169,650. The equipment will have an initial cost of $585,000 and have a 5-year life. If the salvage value of the equipment is estimated to be $25,000, what is the annual net cash flow? Multiple Choice $144,650 $57,650 $281650 $194,650Question 2: SABIRCO wants to investigate the following project. Initial investment $1,000,000 Annual income $200,000 in year 1 and increase every year by 40,000. No salvage value MARR = 10% a) What is the discounted payback period? b) Assuming the project to be used for 8 years. What is the end balance of the project at end of year 8?
- Palmer Corporation is considering the purchase of a new plece of equipment. The cost savings from the equipment would result in an annual increase in net income of $152,000. The equipment will have an initial cost of $494,000 and a 8 year useful life. If the salvage value of the equipment is estimated to be $78,000, what is the payback period? Multiple Choice 2.42 years 3.25 years 8.00 years 4.00 years4 You are planning to invest $300 in new equipment. The equipment will generate cost savings of $300 in year 1 and $400 in year 2. The salvage value at the end of year 2 is zero. The discount rate (cost of capital) is 25% a year. Compute the net present value (NPV) of this investment. O $196 O $496 O $700 O $400 O $796Question 2:Bunnings Ltd is considering to invest in one of the two following projectsto buy a new equipment. Each equipment will last 5 years and have no salvage value at the end. The company’s required rate of return for all investment projects is 8%. The cash flows of the projects are provided below. Equipment 1 Equipment 2 Cost $186,000 $195,000 Future Cash FlowsYear 1Year 2Year 3Year 4Year 5 Year 86 000 93 000 83 000 75 000 55 000 97 000 84 000 86 000 75 000 63 000 Required: a)Identify which option of equipment should the company accept based on Profitability Index? b)Identify which option of equipment should the company accept based on discountedpay back method if the payback criteria is maximum 2 years?
