39 to 41 pmeade

Student Name__ 39) Elsie Moving Company is considering purchasing new equipment that costs $724,000. Its management estimates that the equipment will generate cash flows as follows: Year 1 2 3 4 $ $212.000 212.000 260,000 260,000 158,000 The company's required rate of return is 10%. Using the factors in the table below, calculate the present value of the cash inflows. (Round all calculations to the nearest whole dollar) Present value of $1: 6% 0.943 0.890 0.840 0.792 0.747 7% 0.935 0.873 0.816 0.765 0.713 8% 0.926 0.857 0.794 0.735 0.681 9% 0.91% 0.842 0.772 0.708 0.650 10% 0.909 0.826 0.751 0.683 0.621 A) $791,229 B) $795,284 5838,778 D) $806,742 40) Which of the following situations suggests the acceptance of an investment proposal? A) The present value of the net cash inflows exceeds the initial investment. B) The IRR is lower than the hurdle rate. The cash inflows are less than the initial investment. D) The investment will have a residual value. 41) The discount rate used in a net present value analysis is the A) rate of inflation B) rate of interest earned on a savings account C) required rate of return or the hurdle rate D) rate of interest charged for debt financing of an investment