*BACK KET CALCULATOR FULL SCREEN PRINTER VERSION Waterways Continuing Problem 12 a Waterways puts much emphasis on cash flow when it plans for capital investments. The company chose its discount rate of 8% based on the rate of return must say its owners and creditor Using that rate, Waterways then uses different methods to determine the best decisions for making capital outlays This year Waterways is considering buying five new backhoes to replace the backhoes it now has. The new backhoes are faster, cost less to run, provide for more accurate trench diping, have comfort features for the operators, and have 1-year maintenance agreements to go with them. The old backhoes are working just fine, but they do require considerable maintenance. The beakhon operators are very familiar with the old backhoes and would need to learn some new skills to use the new backhoes The following information is available to use in deciding whether to purchase the new backhoes Old Backhoes New Backhoes Purchase cost Iinen new $86,900 $201.970 Salvage value now $42,100 Investment in major overhaul needed in next year $55,449 Salvage value in 8 years $15,300 $68,000 Remaining life 8 years 8 years Net cash flow generated each year $43,800 Click here to view.py table (a) Evaluate in the following ways whether to purchase the new equipment or overhaul the old equipment (Hint: For the old machine, the initial investment is the cost of the overwul. For the new machine, subtract the salvage value of the old machine to determine the initial cost of the westment) (1) Using the net present value method for buying new or keeping the old. (For calculation purposes, we decimal places as played in the factor table preview the represent value is negative, use either a negative sin preceding the number or parentheses eg (45). Round inal answer to decimal places #278) New Backhoes old Backhoes $30,300 Drunt Value RCES CALDATOR PULLIN INTERVIS Click here to view p.table (a) Evaluate in the following ways whether to purchase the new equipment or overhaul the old uipment. ChatFor the old machine, the investment is the cost of the terror the new machine, subtract the salvage value of the old machine to determine the initial cost of the investment) (1) Using the net present value method for buying new or keeping the old (For calculation purposes se decimal aces as displayed in the factor table provided the present value is negative, se either a negative sign preceding the number eg 45 or parentheses (45). Round Hinal answer to decimal places 1.275.) New Backhoes Old Backhoes Net Present Value dy Waterways should equipment (2) Using the payback method for each choice. (HintFor the old machine, evaluate the payback of an overhaul) (Round answers to 2 decimal plan, L.28) New Bachhoes Old Backhoes Payback Period years Years Waterways should equipment (3) Comparing the profitability index for each choice found answers to decimal places, 9. 1.25) New Backhoes Old Backhoes JRCES CALCULATO FULL SCREEN 1 41 (3) Comparing the profitability index for each choice. (Round answers to 2 decimal places, e.g. 1.25) New Backhoes Old Backhoes Profitability Index tudy Waterways should equipment Calculate the internal rate of return factor for the new and old blackhoes. (Round answers to 5 decimal places, c.9. 5.27647) New Backhoes Old Backhoes TRR Factor (4) Comparing the internal rate of return for each choice to the required 8% discount rate. Waterways should equipment LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT *BACK KET CALCULATOR FULL SCREEN PRINTER VERSION Waterways Continuing Problem 12 a Waterways puts much emphasis on cash flow when it plans for capital investments. The company chose its discount rate of 8% based on the rate of return must say its owners and creditor Using that rate, Waterways then uses different methods to determine the best decisions for making capital outlays This year Waterways is considering buying five new backhoes to replace the backhoes it now has. The new backhoes are faster, cost less to run, provide for more accurate trench diping, have comfort features for the operators, and have 1-year maintenance agreements to go with them. The old backhoes are working just fine, but they do require considerable maintenance. The beakhon operators are very familiar with the old backhoes and would need to learn some new skills to use the new backhoes The following information is available to use in deciding whether to purchase the new backhoes Old Backhoes New Backhoes Purchase cost Iinen new $86,900 $201.970 Salvage value now $42,100 Investment in major overhaul needed in next year $55,449 Salvage value in 8 years $15,300 $68,000 Remaining life 8 years 8 years Net cash flow generated each year $43,800 Click here to view.py table (a) Evaluate in the following ways whether to purchase the new equipment or overhaul the old equipment (Hint: For the old machine, the initial investment is the cost of the overwul. For the new machine, subtract the salvage value of the old machine to determine the initial cost of the westment) (1) Using the net present value method for buying new or keeping the old. (For calculation purposes, we decimal places as played in the factor table preview the represent value is negative, use either a negative sin preceding the number or parentheses eg (45). Round inal answer to decimal places #278) New Backhoes old Backhoes $30,300 Drunt Value RCES CALDATOR PULLIN INTERVIS Click here to view p.table (a) Evaluate in the following ways whether to purchase the new equipment or overhaul the old uipment. ChatFor the old machine, the investment is the cost of the terror the new machine, subtract the salvage value of the old machine to determine the initial cost of the investment) (1) Using the net present value method for buying new or keeping the old (For calculation purposes se decimal aces as displayed in the factor table provided the present value is negative, se either a negative sign preceding the number eg 45 or parentheses (45). Round Hinal answer to decimal places 1.275.) New Backhoes Old Backhoes Net Present Value dy Waterways should equipment (2) Using the payback method for each choice. (HintFor the old machine, evaluate the payback of an overhaul) (Round answers to 2 decimal plan, L.28) New Bachhoes Old Backhoes Payback Period years Years Waterways should equipment (3) Comparing the profitability index for each choice found answers to decimal places, 9. 1.25) New Backhoes Old Backhoes JRCES CALCULATO FULL SCREEN 1 41 (3) Comparing the profitability index for each choice. (Round answers to 2 decimal places, e.g. 1.25) New Backhoes Old Backhoes Profitability Index tudy Waterways should equipment Calculate the internal rate of return factor for the new and old blackhoes. (Round answers to 5 decimal places, c.9. 5.27647) New Backhoes Old Backhoes TRR Factor (4) Comparing the internal rate of return for each choice to the required 8% discount rate. Waterways should equipment LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT