Chapter 14 Capital Investment Decisions b. Wilma Golding is retiring and has the option to take her retirement as a lump sum of $450,000 or to receive $30,000 per year for 20 years. Wilma's required rate of return is 6%. c. David Booth is interested in investing in some tools and equipment so that he can do inde- pendent drywalling. The cost of the tools and equipment is $30,000. He estimates that the return from owning his own equipment will be $9,000 per year. The tools and equipment will last 6 years. d. Patsy Folson is evaluating what appears to be an attractive opportunity. She is currently the owner of a small manufacturing company and has the opportunity to acquire another small company's equipment that would provide production of a part currently purchased exter- nally. She estimates that the savings from internal production will be $75,000 per year. She estimates that the equipment will last 10 years. The owner is asking $400,000 for the equip- ment. Her company's cost of capital is 8%. Required:4. itpute the investment's NPV. assuming a I Compute the investment's IRR Exercise 14-32 Payback. Accounting Rate of Return, Present Value, Net Present Value Internal Rate of Return flows. All scenarios are independent of all other scenarios. Assume that all cash flows are after-tax cash a. Kambry Day is considering investing in one of the following two projects. Either project will require an investment of $20.000. The expected cash flows for the two projects follow Assume that each project is depreciable. Year Project A Project B $ 6,000 $ 6,000 8,000 8,000 10,000 10,000 10,000 3,000 10,000 3,000 (Conti