1. The Zone Company is evaluating a capital expenditure proposal that requires an initial investment of $3,350,000. The machine will improve productivity and thereby increases net after-tax cash inflows by $785,000 per year for 7 years. It will have no salvage value. The company requires a minimum rate of return of 10 percent on this type of capital investment.

Required:

(A) Determine the net present value (NPV) of the investment proposal.

(B) Determine the proposal's internal rate of return, rounded to the nearest tenth of a percent.

(C) What is the estimated payback period for the proposed investment, under the assumption that cash inflows occur evenly throughout the year? Round your answer to 2 decimal places.

(D) What is the present value payback period for the proposed investment? Round your answer to 2 decimal places.

(E) What is the estimated accounting rate of return (on initial investment) for the proposed project? Round your answer to 1 decimal place.

2) DualShaft Inc. manufactures a wide variety of parts for recreational boating, including boat engines. The component is purchased by OEM (original equipment manufacturers) such as Mercury and Honda, for use in the larger and more powerful outboards. The units sell for $725 and sales volume averages 49,000 units per year. Recently, DualShaft's major competitor lowered the price of the equivalent part to $666. The market was very competitive, and DualShaft realized it had to meet the new price or lose significant market share. The controller assembled the following data for the most recent year. Cost and Usage for Production of 49,000 Units:

	Budgeted Cost	Quantity	Actual Cost
Materials	$9,980,000		$10,025,000
Direct Labor	3,996,000		3,895,000
Indirect Labor	5,600,000		5.555,000
Inspection hours		4,000	896,000
Materials handling		111,000	586,000
Machine setups		6.060	1,924,000
Returns and rework		490	100,000

Total Costs : $22,981,000

Required:

Calculate the current cost per unit, target cost for maintaining current market share and profitability.

3) Megan Inc. has a policy of not accepting any investment proposal that requires more than three years to payback. The company is considering the purchase of new drafting equipment for $630,000. The equipment has an estimated useful life of seven years. Megan will use straight-line depreciation for this asset, with no salvage value. Megan's income tax rate is approximately 25%. Required: Determine the required before-tax savings for the drafting equipment to meet the company's payback requirement.$10,025,000 Direct Labor 3,996,000 3,895,000 Indirect Labor 5,600,000 5.555,000 Inspection hours 4,000 896,000 Materials handling 111,000 586,000 Machine setups 6.060 1,924,000 Returns and rework 490 100,000 Total Costs $22,981,000 Required: Calculate the current cost per unit, target cost for maintaining current market share and profitability.