chapter 24- 5

6a, 6b

Required information [The following information applies to the questions displayed below.] Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 6% return from its investments. ssume that instead of a zero salvage value, as shown above, the machine has a salvage value of $28,000 at the d of its three-year life. Compute the machine's net present value. (PV of \$1, FV of \$1, PVA of \$1, and FVA of \$1) Jse appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places. Round resent value amounts to the nearest dollar.) Perez Company is considering an investment of $29,480 that provides net cash flows of $9,100 annually for four years. (a) What is the internal rate of return of this investment? (PV of \$1, FV of \$1, PVA of \$1, and FVA of \$1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) (b) The hurdle rate is 8%. Should the company invest in this project on the basis of internal rate of return? Complete this question by entering your answers in the tabs below. What is the internal rate of return of this investment? Perez Company is considering an investment of $29,480 that provides net cash flows of $9,100 annually for four years. (a) What is the internal rate of return of this investment? (PV of \$1, FV of \$1, PVA of \$1, and FVA of \$1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) (b) The hurdle rate is 8%. Should the company invest in this project on the basis of internal rate of return? Complete this question by entering your answers in the tabs below. The hurdle rate is 8%. Should the company invest in this project on the basis of internal rate of return? Should the company invest in this project on the basis of internal rate of return