Question
#1 Year Cash Flow (X) Cash Flow (Y) 0 $ 19,800 $ 19,800 1 8,800 10,000 2 9,000 7,750 3 8,750 8,650 Calculate the IRR
#1
Year | Cash Flow (X) | Cash Flow (Y) | |||||
0 | $ | 19,800 | $ | 19,800 | |||
1 | 8,800 | 10,000 | |||||
2 | 9,000 | 7,750 | |||||
3 | 8,750 | 8,650 | |||||
Calculate the IRR for each project. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
What is the crossover rate for these two projects? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
What is the NPV of Projects X and Y at discount rates of 0 percent, 15 percent, and 25 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
#2
You are evaluating two different silicon wafer milling machines. The Techron I costs $294,000, has a three-year life, and has pretax operating costs of $81,000 per year. The Techron II costs $510,000, has a five-year life, and has pretax operating costs of $48,000 per year. For both milling machines, use straight-line depreciation to zero over the projects life and assume a salvage value of $58,000. If your tax rate is 22 percent and your discount rate is 10 percent, compute the EAC for both machines. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
Techron1:
Techron II:
Which machine do you prefer? |
multiple choice
|
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