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Homework Help - Q&A from Onl x CengageNOWv2 | Online teachin X + X C https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false G G Google M Gmail YouTube w FlashLine Canvas Microsoft Office C Chegg Course Hero O Quizlet Google Slides E Google Docs Google Drive ) QuillBot Other favorites PROBS 26 eBook Show Me How Average Rate of Return Method, Net Present Value Method, and Analysis for a service company ? 1. PR.26.01A.ALGO The capital investment committee of Arches Landscaping Company is considering two capital investments. The estimated operating income and net cash flows from each 2. PR.26.02A investment are as follows: 3. PR.26.03A Front-End Loader Greenhouse Operating Net Cash Operating Net Cash 4. PR.26.04A Year Income Flow Income Flow 1 5. PR.26.05A $54,000 $168,000 $113,000 $269,000 N 54,000 168,000 86,000 227,000 6. PR.26.06A 3 54,000 168,000 43,000 160,000 4 54,000 168,000 19,000 109,000 + 5 54,000 168,000 9,000 75,000 Total $270,000 $840,000 $270,000 $840,000 Each project requires an investment of $600,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 12% for purposes of the net present value analysis. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 Progress: 1/6 items Check My Work Next Assignment Score: 60.1% All work saved. Save and Exit Submit Assignment for Grading 81'F Rain tomorrow Q Search LOW - B - a myhp 5:57 PM 8/11/2023Homework Help - Q&A from Onl x CengageNOWv2 | Online teachin X + X C https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false G G Google M Gmail YouTube * FlashLine Canvas Microsoft Office C Chegg Course Hero O Quizlet Google Slides E Google Docs Google Drive ) QuillBot > Other favorites PROBS 26 eBook Show Me How 4 0.792 0.683 0.636 0.572 0.482 ? 1. PR.26.01A.ALGO 5 0.747 0.621 0.567 0.497 0.402 2. PR.26.02A 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 3. PR.26.03A 8 0.627 0.467 0.404 0.327 0.233 4. PR.26.04A 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 5. PR.26.05A Required: 6. PR.26.06A la. Compute the average rate of return for each investment. If required, round your answer to one decimal place. Average Rate of Return + Front-End Loader 9.0 X Greenhouse 9.0 X % 1b. Compute the net present value for each investment. Use the present value of $1 table above. If required, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value. Front-End Loader Greenhouse Present value of net cash flow Amount to be invested Net present value $ 143,673 X $ 181,014 X 2. Prepare a brief report for the capital investment committee, advising it on the relative merits of the two investments. Progress: 1/6 items Check My Work Next Assignment Score: 60.1% All work saved. Save and Exit Submit Assignment for Grading 81 F Sunny Q Search L O C WB a myhp 5:58 PM 8/11/2023Homework Help - Q&A from Onl x CengageNOWv2 | Online teachin X + X C https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false G G Google M Gmail YouTube * FlashLine Canvas Microsoft Office C Chegg Course Hero O Quizlet Google Slides E Google Docs Google Drive ) QuillBot > Other favorites PROBS 26 Book Show Me How Front-End Loader 9.0 X % 1. PR.26.01A.ALGO ? Greenhouse 9.0 X% 2. PR.26.02A 1b. Compute the net present value for each investment. Use the present value of $1 table above. If required, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value. 3. PR.26.03A Front-End Loader Greenhouse 4. PR.26.04A Present value of net cash flow 5. PR.26.05A Amount to be invested Net present value $ 143,673 X $ 181,014 X 6. PR.26.06A 2. Prepare a brief report for the capital investment committee, advising it on the relative merits of the two investments. + The front-end loader has a smaller _ net present value because cash flows occur later _ v in time compared to the greenhouse. Thus, if only one of the two projects can be accepted, the greenhouse _ v would be the more attractive. Feedback Check My Work 1a. Divide the estimated average annual income by the average investment. 1b. For each investment, multiply the present value factor for each year (Exhibit 2) by that year's net cash flow. Subtract the amount to be invested from the total present value of the net cash flow. Which investment offers the more favorable net present value? 2. Consider when cash flows are received and the time value of money. Progress: 1/6 items Check My Work Next O Assignment Score: 60.1% All work saved. Save and Exit Submit Assignment for Grading Co 81.F 5:58 PM Q Search Sunny 8/11/2023Homework Help - Q&A from Onl x CengageNOWv2 | Online teachin X + X C https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false G G Google M Gmail YouTube s FlashLine Canvas Microsoft Office C Chegg Course Hero O Quizlet Google Slides E Google Docs Google Drive ) QuillBot > Other favorites PROBS 26 Book Cash Payback Period, Net Present Value Method, and Analysis ? 1. PR.26.01A.ALGO Elite Apparel Inc. is considering two investment projects. The estimated net cash flows from each project are as follows: 2. PR.26.02A Year Plant Expansion Retail Store Expansion $450,000 $500,000 3. PR.26.03A 2 450,000 400,000 O 4. PR.26.04A 3 340,000 350,000 4 280,000 250,000 5. PR.26.05A 5 180,000 200,000 6. PR.26.06A Total $1,700,000 $1,700,000 Each project requires an investment of $900,000. A rate of 15% has been selected for the net present value analysis. + Present Value of $1 at Compound Interest Year 60 10% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 Progress: 2/6 items Check My Work Previous Next O Assignment Score: 60.1% All work saved. Save and Exit Submit Assignment for Grading 5:59 PM 81.F Q Search Near record LOW - a 8/11/2023Homework Help - Q&A from Onl x CengageNOWv2 | Online teachin X + X C https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false G G Google M Gmail YouTube s FlashLine Canvas Microsoft Office C Chegg Course Hero O Quizlet Google Slides E Google Docs Google Drive ) QuillBot > Other favorites PROBS 26 eBook 7 0.665 0.513 0.452 0.376 0.279 1. PR.26.01A.ALGO ? 8 0.627 0.467 0.404 0.327 0.233 2. PR.26.02A 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 3. PR.26.03A Required: 4. PR.26.04A la. Compute the cash payback period for each project. Cash Payback Period 5. PR.26.05A Plant Expansion 2 years 6. PR.26.06A Retail Store Expansion 2 years 1b. Compute the net present value. Use the present value of $1 table above. If required, round to the nearest dollar. + Plant Expansion Retail Store Expansion Total present value of net cash flow $ 1,205,040 V 1,210,100 Less amount to be invested Net present value 305,040 V $ 310,100 2. Because of the timing of the receipt of the net cash flows, the retail store expansion _ v offers a higher net present value Feedback Check My Work Progress: 2/6 items Check My Work Previous Next Assignment Score: 60.1% All work saved. Save and Exit Submit Assignment for Grading 81.F Near record Q Search 5:59 PM 8/11/2023Homework Help - Q&A from Onl x CengageNOWv2 | Online teachin X + X C https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false G G Google M Gmail YouTube * FlashLine Canvas Microsoft Office C Chegg Course Hero O Quizlet Google Slides E Google Docs Google Drive ) QuillBot > Other favorites PROBS 26 eBook 1. PR.26.01A.ALGO Net Present Value Method, Internal Rate of Return Method, and Analysis for a Service Company ? The management of Advanced Alternative Power Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: 2. PR.26.02A Biofuel 3. PR.26.03A Year Wind Turbines Equipment 1 $280,000 $300,000 4. PR.26.04A 2 280,000 300,000 5. PR.26.05A 3 280,000 300,000 4 280,000 300,000 6. PR.26.06A The wind turbines require an investment of $887,600, while the biofuel equipment requires an investment of $911, 100. No residual value is expected from either project. Present Value of an Annuity of $1 at Compound Interest + Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 N 1.833 1.736 1.690 1.626 1.528 W 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 con 775 Progress: 4/6 items Check My Work Previous Next Assignment Score: 60.1% All work saved. Save and Exit Submit Assignment for Grading 81 F Q Search myhp 6:01 PM Sunny a 8/11/2023Homework Help - Q&A from Onl x CengageNOWv2 | Online teachin X + X C https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false G G Google M Gmail YouTube FlashLine Canvas Microsoft Office C Chegg Course Hero O Quizlet Google Slides E Google Docs Google Drive ) QuillBot > Other favorites PROBS 26 eBook 9 5.328 4.772 ? 1. PR.26.01A.ALGO 6.802 5.759 4.031 10 7.360 6.145 5.650 5.019 4.192 2. PR.26.02A Required: 3. PR.26.03A la. Compute the net present value for each project. Use a rate of 6% and the present value of an annuity of $1 in the table above. If required, round to the nearest dollar. Wind Turbines Biofuel Equipment 4. PR.26.04A O Present value of annual net cash flows 970,200 $ 1,039,500 5. PR.26.05A Less amount to be invested 887,600 911,100 6. PR.26.06A Net present value 82,600 $ 128,400 + 1b. Compute a present value index for each project. If required, round your answers to two decimal places. Present Value Index Wind Turbines 1.77 X Biofuel Equipment 1.14 V 2. Determine the internal rate of return for each project by (a) computing a present value factor for an annuity of $1 and (b) using the present value of an annuity of $1 in the table above. If required, round your present value factor answers to three decimal places and internal rate of return to the nearest whole percent. Wind Turbines Biofuel Equipment Present value factor for an annuity of $1 Internal rate of return 10.95 X % 15.77 X % The mat - hinfial aquinment Progress: 4/6 items Check My Work Previous Next Assignment Score: 60.1% All work saved. Save and Exit Submit Assignment for Grading Top Events Event Brief Q Search L O C WB a myhp 6:02 PM 8/11/2023Homework Help - Q&A from Onl x CengageNOWv2 | Online teachin X + X C https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false G G Google M Gmail YouTube * FlashLine Canvas Microsoft Office C Chegg Course Hero O Quizlet Google Slides E Google Docs Google Drive ) QuillBot > Other favorites PROBS 26 eBook Present value of annual net cash flows 970,200 V $ 1,039,500 ? 1. PR.26.01A.ALGO Less amount to be invested 887,600 V 911,100 2. PR.26.02A Net present value 82,600 $ 128,400 3. PR.26.03A 1b. Compute a present value index for each project. If required, round your answers to two decimal places. 4. PR.26.04A Present Value Index 5. PR.26.05A Wind Turbines 1.77 X Biofuel Equipment 1.14 6. PR.26.06A 2. Determine the internal rate of return for each project by (a) computing a present value factor for an annuity of $1 and (b) using the present value of an annuity of $1 in the table above. If required, round your present value factor answers to three decimal places and internal rate of return to the nearest whole percent. + Wind Turbines Biofuel Equipment Present value factor for an annuity of $1 Internal rate of return 10.95 X % 15.77 X % 3. The net present value, present value index, and internal rate of return all indicate that the biofuel equipment is/are a better financial opportunity compared to the wind turbines _ v , although both investments meet the minimum return criterion of 6%. Feedback Check My Work Progress: 4/6 items Check My Work Previous Next Assignment Score: 60.1% All work saved. Save and Exit Submit Assignment for Grading Top Events Q Search 6:02 PM Event Brief a myhp 8/11/2023