Your company is considering an investment in a new facility.
The expected cash flows are presented below:
Year Cash Outflow Cash Inflow
1 1,604,980$ 154,000$
2 0 350,010$
3 50,550$ 453,910$
4 0 353,540$
5 0 506,940$
A) What is the payback period?
Read details on Partial Year Payback ( Show your calculation!!!!)
Note: Show you answer with 2 digits or precision. As an example 3.21 Years
2) A sheet metal company needs a new higher speed metal cutter.
Given below is the necessay financial information to solve the problem.
The initial investment is: 308,090$
Salvage Value is: 20,320$
Incremental Revenue 157,560$
Incremental Expenses 92,260$
B) What is the accounting rate of return (ARR)?
Note: Show your answer with 2 digits of precision. As an example 31.22%
3) Project X-RAY is being considered for an expansion of current capabilities of the company.
Given below is the necessay financial information to solve the problem.
The initial investment is: 12,166$
After Tax net cah inflows 2,079$
Discount Rate 10%
C) What is the net present value (NPV) of the investment?
D) Should the project be considered? Justify your answer.
4) Dalkey Inc. is considering an investment.
The initial Investment is: 86,829$
After Tax net cash inflows: 14,130$
E) What is the internal rate of return (IRR) of the investment?
F) If the required rate of return is 14% should this project be considered? Justify your answer.
G) If the required rate of return is 6% should this project be considered? Justify your answer
