Flint Systems is considering investing in production- management software that costs $630,000, has $67,000 residual value, and leads to cost savings of $1,650,000 per year over its five-year life. Calculate the average amount invested in the asset that should be used for calculating the accounting rate of return $697,000 .A $348,500 .B $67,000
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- Your company is planning to purchase a new log splitter for is lawn and garden business. The new splitter has an initial investment of $180,000. It is expected to generate $25,000 of annual cash flows, provide incremental cash revenues of $150,000, and incur incremental cash expenses of $100,000 annually. What is the payback period and accounting rate of return (ARR)?Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 8%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?Gina Ripley, president of Dearing Company, is considering the purchase of a computer-aided manufacturing system. The annual net cash benefits and savings associated with the system are described as follows: The system will cost 9,000,000 and last 10 years. The companys cost of capital is 12 percent. Required: 1. Calculate the payback period for the system. Assume that the company has a policy of only accepting projects with a payback of five years or less. Would the system be acquired? 2. Calculate the NPV and IRR for the project. Should the system be purchasedeven if it does not meet the payback criterion? 3. The project manager reviewed the projected cash flows and pointed out that two items had been missed. First, the system would have a salvage value, net of any tax effects, of 1,000,000 at the end of 10 years. Second, the increased quality and delivery performance would allow the company to increase its market share by 20 percent. This would produce an additional annual net benefit of 300,000. Recalculate the payback period, NPV, and IRR given this new information. (For the IRR computation, initially ignore salvage value.) Does the decision change? Suppose that the salvage value is only half what is projected. Does this make a difference in the outcome? Does salvage value have any real bearing on the companys decision?
- Walden Industries is considering investing in production-management software that costs $600,000, has $67,000 residual value, and leads to cost savings of $2,300,000 per year over its five-year life. Calculate the average amount invested in the asset that should be used for calculating the accounting rate of return. Question content area bottom Part 1 A. $333,500 В. $667,000 С. $67,000 D. $600,000Walden Industries is considering investing in production−management software that costs $620,000, has $60,000 residual value, and leads to cost savings of $2,310,000 per year over its five−year life. Calculate the average amount invested in the asset that should be used for calculating the accounting rate of return. A. $340,000 B. $60,000 C. $680,000 D. $620,000A 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. 4 Compute the investment's NPV, using the discount rate 5 Calculate the investment's Internal Rate of Return 6 Is this a good investment for the firm? Why or why not?
- 4. Machine A costs $800, requires annual maintenance of $150, and will last for 10 years. Machine B costs $600, requires annual maintenance of $200, and will last for 5 years. What is the calculated present worth of machine B if the alternative will be chosen based on a present worth analysis and the required return is 10%? A. $843.31 B. $1,358.16 C. $1,721.69 D. $2,201.47 E. $2,716.47 Answer: DGive me right solution according to the question.... Help me urgenttttttttt Installing an automated production system costing $278,000 is initially expected to save Zia corporation $52,000 in expenses annually. If the system needs $5000 in operating and maintenance costs each year and has a salvage values of $25,000 at Year 10, what is the IRR of this system? If the company wants to earn at least 12% on all investments, should this system be purchased?please colud you explain me what how you using calculator or computation to determine NPV or IRR. A firm has the following investment alternatives: Year A B C 1 $400 $--- $-- 2 400 400 --- 3 400 800 --- 4 400 800 1,800 Each investment costs $1,400, and the firm's cost of capital is 10 percent. a. What is each investment's internal rate of return? b. Should the firm make any of these investment? c. What is each investment's net present value? d. Should the firm firm make any of these investments?
- 7. Assume a company is going to make an investment of $300,000 in a machine and the following are the cash flows that two different products would bring in years one through four. The company's required rate of return is 12%. Option A Option B Product A Product B $190,000 $150,000 190,000 180,000 60,000 60,000 20,000 70,000 Using the appropriate EXCEL spreadsheet in the Chapter11 NPV IRR Analysis.xlsx Download Chapter11 NPV IRR Analysis.xlsx, answer the following questions: What is the NPV for Option A? What is the NPV for Option B? What is the IRR for Option A? What is the IRR for Option B? PLEASE NOTE #1: The dollar amounts will be with "$" and commas as needed and rounded to two decimal places (i.e. $12,345.67). Round your IRR answers, in percentage format, to two decimal places (i.e. 12.34%). Given the above answers, which project should the…Question 9: You have a opportunity to make a investment that has $10.000,000 landing, 1.500.000 machine, outsourcing 500.000 and finance cost 1.000.000. Machines have 1.000.000 scrap value at end of 5th year. You will pay interest payment at the end of project, that is $400.000. If you make this investment now, you will receive $4.500,000 one year from today, $3.000,000, $5.000,000 and $ 4.000,000 respectively. The appropriate discount rate for this investment is 15 percent. Tax rate is % 30. Should you make the investment?QUESTION 1 Agro Tech Corporation is considering investing in a new IT system for selling to its clients. The company has identified two new possible systems, which would be suitable for its customers. Only one of the systems can be selected and the directors are looking for guidance on which system would be the best. The company requires a 15% rate of return on projects of this nature. The installation cost per project will be R100 000 each, while systems can be disposed for R200 000 each after five- years life span. Cash flows for Agro Tech Corporation: IT System (Rands) PERIOD 1 2 3 4 5 SYSTEM A -4 000 000 R1 800 000 R1 700 000 R1 600 000 R1 500 000 R1 400 000 SYSTEM B -3 500 000 1 500 000 1 500 000 1 500 000 1 400 000 R1 300 000 Required: 1.1 Determine the payback period in years, months and days for both systems 1.2 Based on your calculations in 1.1, which system should Agro Tech Corporation consider? Why? 1.3 Calculate the Net Present Value for both systems. 1.4 Calculate the…