Chapter 12 Homework a. Cuenca Company is considering the purchase of now equipment that will speed up the process for producing flash drives. The equipment will cost $7,200,000 and have a life of 3 years 1. EX12.31 ALGO with no expected salvage value, The expected cash flows associated with the project follow Cash Cash Year 2 EX12.33 ALGO EX 1234 4. EX12.3SALGO 5. PR 12.41 . PR 12.46 58,000,000 8,000,000 8,000,000 8,000,000 8,000,000 $,000,000 6,000,000 6,000,000 6,000,000 6,000,000 b. Kathy shorts i evaluating an investment in an information system that will save $240,000 per year. She estimate that the system wil last 10 years. The system ll cost S 1,248,000. Her company's cost of capital is 10%. c. Elmo Enterprises just announced that a new plant would be built in Helper, Utah. Elmo told its stockholders that the plant has an expected life of 15 years and an expected IRR equal to 25%-The cost of building the plant is expected to be 2,880,000. 1. calculate the IRR for Cuenca Company. The company's cost of capital is 16%. Round your answer to the nearest percent. Should tha naw equipment be purchasad? 2. Calculate Kathy Short's IRR. Round your answer to the nearest percent. Should she acquire the now system? 3. what should be Elmo Enterprises expected annual cash flow from the plant? Round your answer to the nearest dollar Check My Work Previous Next Progress: 36 items ssignmen Score: 0.0% Save and Exit Subrmit Assignment for Grading AM 11:12 11/8/2018 EN