Net present value: Riggs Corp management is planning to...

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CHAPTER 10 - Solutions Project Decision Rules (NPV, IRR, Payback, Discounted Payback) 10.1 Net present value: Riggs Corp. management is planning to spend $650,000 on a new marketing campaign. They believe that this action will result in additional cash flows of $325,000 over the next three years. If the discount rate is 17.5 percent, what is the NPV on this project?
10.5 Net present value: Blanda Incorporated management is considering investing in two alternative production systems. The systems are mutually exclusive, and the cost of the new equipment and the resulting cash flows are shown in the accompanying table. If the firm uses a 9 percent discount rate for their production systems, in which system should the firm invest? LO 2 Year System 1 System 2 0 15,000 45,000 1 15,000 32,000
2 15,000 32,000 3 15,000 32,000
10.6 Payback: Refer to problem 10.5. What are the payback periods for production systems 1 and 2?

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