enas' investment. Should she invest ? What if the estimated return wasng flash drives. The equipment will cost $7,200,000 and have a life of 5 years with no expected salvage value. The expecof capital is 10%.t of building the plant is expected to be $2,880,000.be purchased?of this equipment are being considered as sources of the equipment. After-tax cash inflows for the two competing project, but this equipment will produce even cash flows over its 5-year life. What must the annual cash flow be for this equipmrnchined parts for manufacturers of tractors. The outlay required is $384,000. The NC equipment will last 5 years with no ex

al Rate of Returnproject is depreciable.ng. The cost of the tools and equipment is $30,000. He estimates that the return from owning his own equipment will be all manufacturing company and has the opportunity to acquire another small company's equipmem char would provide prack is important, which project should be chosen? Which would you choose ?why the ARR performs better than the payback period in this setting.vid invest ?h inflow of $693,000 one year from now. The company's cost of capital is 10%.he cost of capital, and (c) the profit earned on the investment. Now compute the present value of the profit earned on the ihe next 4 years.e and will produce a uniform series of cash savings. The NPV of the

nvestment of $4,607,200 and will produce net cashel is $3,600,000, and it has a net annual after-tax cash inflow of $900,000. The CAM Y model is more expensive, selling fcash flows: $450,000, $225,000, $600,000, $600,000,has a projected life cycle of 5 years. After 5 years, the equipment can be sold for $360,000. Working capital is also expect

has a net annual after-tax cash inflow of $2,400,000. The FLEX-2Z is more expensive, selling for $11,200,000, but it will h flows associated with the projectARR correctly signals that one project should be preferred over the other.

nnual after-tax cash flows ofcted cash flows associated with the project follow:ts are as follows:ment to be selected over the other two ? Assume a 12% discount rate.xpected salvage value. The expected after-tax cash flows

$9,000 per year. The tools and equipment will last 6 years.roduction of a parr curremly purchased externally. She estimates that the savings from internal production will be $75,000investment.

for $4,200,000, but it will pro ted to increase by $360,000, which Talmage will recover by the end of the new product's life cycle. Annual cash operating

produce a net annual after-tax

0 per year. She estimates that the equipment will last 10 years. The owner is asking $400,000 for

g expenses are estimated at $1,620,000. The required rate of return

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