1.

A company is considering 3 investments and uses NPV to rank them in order of priority. Based on the NPV computed for each below, select which project would have the highest priority and enter its value as your answer.

Project T 6560 Project N 2226 Project R 3786

2. Mylon, Inc., is considering the purchase of a machine that would cost $100,000 and would last for 9 years. At the end of 9 years, the machine would have a salvage value of $23,000. The machine would reduce labor and other costs by $19,000 per year. Additional working capital of $2,000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 13% on all investment projects. Assuming a 13% return, what is the net present value of the proposed project? Round final answer to the nearest dollar. You must use the Annuity table when appropriate to get the correct answer. Hint: list each cash flow and when it occurs, note if inflow + or outflow - , if single sum or annuity and if you need to discount it using one of the PV tables, multiply by the appropriate factor.