Required information [The following information applies to the questions displayed below.] Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 6% return from its investments. Initial investment Net cash flows: Year 1 Year 2 Year 3 Compute this machine's net present value. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.) Year 1 Year 2 Year 3 Totals Initial investment Net present value $ ( 360,000 ) 190,000 138,000 113,000 Net Cash Flow S 0 Present Value Factor Present Value of Net Cash Flows S S 0 0
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- San Lucas Corporation is considering investment in robotic machinery based upon the following estimates: a. Determine the net present value of the equipment, assuming a desired rate of return of 10% and annual net cash flows of 700,000. Use the present value tables appearing in Exhibits 2 and 5 of this chapter. b. Determine the net present value of the equipment, assuming a desired rate of return of 10% and annual net cash flows of 500,000, 700,000, and 900,000. Use the present value tables (Exhibits 2 and 5) provided in the chapter in determining your answer. c. Determine the minimum annual net cash flow necessary to generate a positive net present value, assuming a desired rate of return of 10%. Round to the nearest dollar. d. Interpret the results of parts (a), (b), and (c).[The following information applies to the questions displayed below.] Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 6% return from its investments. Initial investment Net cash flows: Year 1 Year 2 Year 3 QS 11-19 (Algo) Net present value with unequal cash flows LO P3 Compute this machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.) Year 1 Year 2 Year 3 Totals Initial investment Net present value Net Cash Flow $ $ (220,000) 175,000 128,000 89,000 $ 175,000 128,000 89,000 392,000 Present Value Factor Present Value of Net Cash Flows $ $ 0 0! Required information [The following information applies to the questions displayed below.] Following is information on an investment considered by Hudson Co. The investment has zero salvage value. The company requires a 6% return from its investments. Year 1 Year 2 Initial investment Expected net cash flows ins Year 1 Year 2 Year 3 Compute this investment's net present value. (PV of $1. EV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places.) Year 3 Totals Amount invested Net present value Investment Al $(390,000) Cash Flow 110,000 106,000 91,000 Present Value of 1 at 6% Present Value
- Use the following information for the Quick Study below. (Algo) [The following information applies to the questions displayed below.] Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 6% return from its investments. Initial investment Net cash flows: Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 QS 24-19 (Algo) Net present value with unequal cash flows LO P3 Compute this machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.) Totals Initial investment Net present value Net Cash Flow $ $ $ (240,000) 195,000 90,000 103,000 388,000 195,000 90,000 103,000 Present Value Factor Present Value of Net Cash Flows $ $ 0 0Dogwood Company is considering a capital investment in machinery: (Click the icon to view the data.) 8. Calculate the payback. 9. Calculate the ARR. Round the percentage to two decimal places. 10. Based on your answers to the above questions, should Dogwood invest in the machinery? 8. Calculate the payback. Amount invested Expected annual net cash inflow Payback 1,500,000 24 500,000 3 years 9. Calculate the ARR. Round the percentage to two decimal places. Average annual operating income Average amount invested ARR Data Table Initial investment $ 1,500,000 Residual value 350,000 Expected annual net cash inflows 500,000 Expected useful life 4 years Required rate of return 15%Dock Company is considering a capital investment in machinery: E (Click the icon to view the data.) 8. Calculate the payback. 9. Calculate the ARR. Round the percentage to two decimal places. 10. Based on your answers to the above questions, should Dock invest in the machinery? 8. Calculate the payback. Payback years - X Data Table Initial investment $ 1,500,000 Residual value 350,000 Expected annual net cash inflows 500,000 Expected useful life 4 years Required rate of return 9% Print Done
- Required information [The following information applies to the questions displayed below.] Following is information on an investment considered by Hudson Co. The investment has zero salvage value. The company requires a 9% return from its investments. Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 Totals Amount invested Net present value Compute this investment's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places.) Year 1 Year 2 Year 3 Totals Amount invested Net present value Cash Flow $ Investment Al $(330,000) Cash Flow 180,000 102,000 115,000 0 Present Value of 1 at 9% X 4 decimal places required. Assume that instead of a zero salvage value, as shown above, the investment has a salvage value of $30,500. Compute the investment's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from…[The following information applies to the questions displayed below.] Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 3% return from its investments. Initial investment Net cash flows: $ (220,000) Year 1 160,000 128,000 125,000 Year 2 Year 3 QS 11-19 (Algo) Net present value with unequal cash flows LO P3 Compute this machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.) Net Cash Flow Present Value Present Value of Net Factor Cash Flows Year 1 Year 2 Year 3 Totals Initial investment Net present valueA company is evaluating an investment. The company uses the straight-line method of depreciation. Use the following information to compute the accounting rate of return. Show your calculations and round to one decimal place. Project Investment SR875,000 Residual value 0 Operating income: Year 1 120,000 Year 2 120,000 Year 3 120,000 Year 4 120,000 Year 5 120,000
- Merrill Corporation has the following information available about a potential capital investment: Initial investment Annual net income Expected life Salvage value Merrill's cost of capital Assume straight line depreciation method is used. Required: 1. Calculate the project's net present value. (Future Value of $1,Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. 2. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 7 percent. 3. Calculate the net present value using a 9 percent discount rate. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) $ 2,500,000 $ 160,000 Req 1 and 2 Req 3 and 4 8 years $ 170,000 Note: Use appropriate factor(s) from the tables provided. 4. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 9 percent. 7 Complete this…Using the provided information calculate the NPV Mkhize Ltd is considering buying a machine and has presented the following information; Purchase price Expected economic life Minimum required rate of return Net cash inflows Rate of taxation Depreciation is calculated using the straight-line method A. Positive R12,883 B. Negative R9,086 OC. Positive R10,089 OD. Negative R988 R130 000 10 years 12% R25000 30%Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment Annual cash inflows Salvage value of equipment Life of the investment Required rate of return Multiple Choice The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided. The internal rate of return of the investment is closest to: O O O 27% 25% 23% $37,000 $ 8,800 $ 21% 0 15 years 10 %