LENLEN Company is considering on investing in new automated machinery.The machinery will be used for five years in the project. (Prevailing cost ofcapital at 10% per annum) The new investment needs a P1,700,000 cashoutflow. The estimated cash inflow of income from the investment ofmachinery for the next five (5) years would be:CASH INFLOWSYEAR1P 950,000750,000650,000350,000150,000REQUIRED: By applying the following evaluation techniques if theinvestment economically acceptable. Show your complete solution andAnswer it if acceptable or not acceptable from 1 to 4 below:3. Net Present Value4. Profitability Index

Present value = (C1 * (1+r)-1)+ (C2 * (1+r)-2) + ...... +(Cn * (1+r)-n) Where r = Required rate of…

LENLEN Company is considering on investing in new automated machinery. The machinery will be used for five years in the project. (Prevailing cost of capital at 10% per annum) The new investment needs a P1,700,000 cash outflow. The estimated cash inflow of income from the investment of machinery for the next five (5) years would be: YEAR CASH INFLOWS 1 P 950,000 750,000 2 3 650,000 350,000 150,000 4 5 REQUIRED: By applying the following evaluation techniques if the investment economically acceptable. Show your complete solution and Answer it if acceptable or not acceptable from 1 to 4 below: 3. Net Present Value 4. Profitability Index

LENLEN Company is considering on investing in new automated machinery. The machinery will be used for five years in the project. (Prevailing cost of capital at 10% per annum) The new investment needs a P1,700,000 cash outflow. The estimated cash inflow of income from the investment of machinery for the next five (5) years would be: YEAR CASH INFLOWS 1 P 950,000 750,000 2 3 650,000 350,000 150,000 4 5 REQUIRED: By applying the following evaluation techniques if the investment economically acceptable. Show your complete solution and Answer it if acceptable or not acceptable from 1 to 4 below: 3. Net Present Value 4. Profitability Index

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 13E: Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a...

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