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Can anyone help me answer the question(s) for each requirement mentioned above with correct answers, please? Can you all show me the step by step
Can anyone help me answer the question(s) for each requirement mentioned above with correct answers, please? Can you all show me the step by step work in order to compute the all the correct answers to each questions and/or section of each requirement, please?
E21-28 (similar to), Aikmen Lab plans to purchase a new centrifuge machine for its Georia facility. The machine costs $437,000 and is expected to have a useful life of 8 years, with a terminal disposal value of $42,000. Savings in cash operating costs are expected to be $85,000 per year. However, additional working capital is needed to keep the machine running efficiently. The working capital must continually be replaced, so an investment of $15,000 needs to be maintained at all times, but this investment is fully recoverable (will be "cashed in") at the end of the useful life. Aikmen Lab's required rate of return is 8%. Ignore income taxes in your analysis. Assume all cash flows occur at year-end except for initial investment amounts. Aikmen Lab uses straight-line depreciation for its machines. Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements i Requirements 1. Calculate net present value. 2. Calculate internal rate of return. 3. Calculate accrual accounting rate of return based on net initial investment 4. Calculate accrual accounting rate of return based on average investment. 5. You have the authority to make the purchase decision. Why might you be reluctant to base your decision on the DCF methods? E21-28 (similar to), Aikmen Lab plans to purchase a new centrifuge machine for its Georia facility. The machine costs $437,000 and is expected to have a useful life of 8 years, with a terminal disposal value of $42,000. Savings in cash operating costs are expected to be $85,000 per year. However, additional working capital is needed to keep the machine running efficiently. The working capital must continually be replaced, so an investment of $15,000 needs to be maintained at all times, but this investment is fully recoverable (will be "cashed in") at the end of the useful life. Aikmen Lab's required rate of return is 8%. Ignore income taxes in your analysis. Assume all cash flows occur at year-end except for initial investment amounts. Aikmen Lab uses straight-line depreciation for its machines. Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements i Requirements 1. Calculate net present value. 2. Calculate internal rate of return. 3. Calculate accrual accounting rate of return based on net initial investment 4. Calculate accrual accounting rate of return based on average investment. 5. You have the authority to make the purchase decision. Why might you be reluctant to base your decision on the DCF methodsStep by Step Solution
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