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acctg 213 ch 12 hw

# acctg 213 ch 12 hw - Jeremy Liebman 950929750 Tomcal...

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Jeremy Liebman 950929750 Tomcal Chapter 12 Ex – 25, 26, 27, 28, 29, 30, 32, 34, 36, 38 25. 1. Marson blood analysis equipment: Year Cash Flow Discount Factor Present Value 0 \$(200,000) 1.000 \$(200,000) 1 \$120,000 0.893 \$107,160 2 \$100,000 0.797 \$79,700 3 \$80,000 0.712 \$56,960 4 \$40,000 0.636 \$25,440 5 \$20,000 0.567 \$11,340 NPV \$80,600 Lawson blood analysis equipment: Year Cash Flow Discount Factor Present Value 0 \$(200,000) 1.000 \$(200,000) 1 \$20,000 0.893 \$17,860 2 \$20,000 0.797 \$15,940 3 \$120,000 0.712 \$85,440 4 \$160,000 0.636 \$101,760 5 \$180,000 0.567 \$102,060 NPV \$123,060 2. CF = \$323,060/3.605 CF = \$89,614 per year Cash flow must exceed \$89,614/year to be selected 26. 1. Payback period is 2.67 years. 2. ARR = (\$300,000 – \$160,000)/\$800,000 or 17.5% 3. Year Cash Flow Discount Factor Present Value 0 \$(800,000) 1.000 \$(800,000) 1 \$300,000 0.909 \$272,700 2 \$300,000 0.826 \$247,800 3 \$300,000 0.751 \$225,300 4 \$300,000 0.683 \$204,900 5 \$300,000 0.621 \$186,300 NPV \$337,000 4. IRR is between 24% and 26% because its discount factor is 2.67. 27. 1. Project A’s payback time is 2.6 years. Project B’s payback time is 2.5 years. I would choose project B if payback time was the main issue. Otherwise, I would choose project A because it is more profitable. 2. Project A: 44% Project B: 18% 3. She should take the annuity because she would make \$10,632 more that way (assuming she lives 20 more years).

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acctg 213 ch 12 hw - Jeremy Liebman 950929750 Tomcal...

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