Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A B Consider the following two machines a company can purchase. The following table provides the costs of the machines and the annual cash flows

A

image text in transcribed

image text in transcribed

B

image text in transcribed

Consider the following two machines a company can purchase. The following table provides the costs of the machines and the annual cash flows obtained from the machines over their lifetimes. nitial CostCash Inflows per year Years of Service Machine A $15,0008,000 Machine B 5,000 11,000 The discount rate is 4% What is the net present value for each machine? Machine A 33016.44 Correct response: 33,016.44:2 Machinne B 25526 Correct response: 25,526+2 Using the correct answers from the previous question, what is the equivalent annual cash flows for each machine? EAC Number EACB Number Growth Enterprises believes its latest project, which will cost $50,000 to install, will generate a perpetual growing stream of cash flows The cash flow at the end of the first year will be $4,000, and cash flows in future years are expected to grow indefinitely at an annual rate of 5% If the discount rate for the project is 9%, what is the project NPV? NPVNumber (please round your final result to 2 decimals if necessary) What is the internal rate of return (IRR) for the project? IRR- I Number (Note: the above answer is in terms of percentage. Please round your final result to 2 decimals if necessary)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions