1.If a copy centeris considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net cash flow of $20,000 per year, what is the payback period?

2.Cinemar Productions bought a piece of equipment for $55,898 that will last for 5 years. The equipment will generate net operating cash flows of $14,000 per year and will have no salvage value at the end of its life. What is the internal rate of return?

3.Consolidated Aluminum is considering the purchase of a new machine that will cost $308,000 and provide the following cash flows over the next five years: $88,000, 92,000, $91,000, $72,000, and $71,000. Calculate the IRR for this piece of equipment.

4.A restaurantis considering the purchase of new tables and chairs for their dining room with an initial investment cost of $515,000, and the restaurant expects an annual net cash flow of $103,000 per year. What is the payback period?

5.A grocery store is considering the purchase of a new refrigeration unit with an initial investment of $412,000, and the store expects a return of$100,000 in year one, $72,000 in years two and three, $65,000 in years four and five, and $38,000 in year six and beyond, what is the payback period?

6.An auto repair company needs a new machine that will check for defective sensors. The machine has aninitial investment of $224,000. Incremental revenues, including cost savings, are $120,000, and incremental expenses, including depreciation, are $50,000. There is no salvage value. What is the accounting rate of return (ARR)?

7.Conestoga Plumbing plans to invest in a new pump that is anticipated to provide annual savings for 10 years of $50,000. The pump can be sold at the end of the period for $100,000. What is the present value of the investment in the pump at a 9% interest rate given that savings are realized at year end?

8. Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment.

9.Your company is planning to purchase a new log splitter for its lawn and garden business. The new splitter has an initial investment of $180,000. It is expected to generate $25,000 of annual cash flows, provide incremental cash revenues of $150,000, and incur incremental cash expenses of $100,000 annually.

What is the payback period and accounting rate of return (ARR)?

10.Jasmine Manufacturing is considering a project that will require an initial investment of $52,000 and is expected to generate future cash flows of $10,000 for years 1 through 3, $8,000 for years 4 and 5, and $2,000 for years 6 through 10. What is the payback period for this project?

11.Ralston Consulting, Inc., has a $25,000 overdue debt with Supplier No. 1. The company is low on cash, with only $7,000 in the checking account and does not want to borrow any more cash. Supplier No. 1 agrees to settle the account in one of two ways:

Option 1: Pay $7,000 now and $23,750 when some large projects are finished, two years from today.

Option 2: Pay $35,000 three years from today, when even larger projects are finished.

Assuming that the only factor in the decision is the cost of money (8%), which option should Ralston choose?(15 Points)

12.Pitt Company is considering two alternative investments. The company requires a 12% return from its investments. Neither option has a salvage value. (15 Points)

Present Car New Car Purchase cost new $30,000 Transmission and repairs $6,500 Annual cash operating cost 8,500 7,500 Fair market value new 6,000 Fair market value in five years 1,000 6,000 Project X Project Y Initial investment $180,000 $118,000 Net cash flows anticipated: Year 1 82,000 35,000 Year 2 59,000 55,000 Year 3 92,000 72,000 Year 4 81,000 68,000 Year 5 76,000 27,000