ebook For descount factors use Exhibit 120.1 and Exhibit 120.2. All scenarios are independent of all other scenanos. Assume that all cash flows are after tax cash flow 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 Project 1 56,000 $6,000 8,000 3,000 10,000 10,000 4 10,000 3,000 10,000 3,000 2 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 ate of return c. David Booth is interested in investing in some tools and equipment so that he can do independent drywaling. 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 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 opportunity to another small company's equipment that would provide production part currently purchased externally. 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 equipment. Her company's cost of capital is Required: 1. Conceptual Connection: What is the payback period for much of Kambory Day's project x7 Round your answers to two deomal places 26 years Project B 2.6 years If rapid payback is important, which project should be chosen PrnitA Project 2. Conceptual Connection which ar ambry projects should be chosened on the Redond to the more percent Accounting rate of return (AR) Project A ARR Project : ARR 60 X Project A 3. Assuming that Wima Golding will live for another 20 years, should she take the lump sum or the ? Wilma should take the annuity, X 4. Ansuring a required rate of return of 8% for David Booth, calculate the new of the wivestment. It required, round to the nearest dole. NPV 511,606 Should David invest? Yes 5. Calculate the trk for Patsy Folson's project. Round your answer to the nearest percent. 13.43 X Should Patsy acquire the equipment? Yes Feedback