Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Evans industries whiches to select the best of three possible machines, each of which is expected to satisfy the firms ongoing need for additional aluminum

Evans industries whiches to select the best of three possible machines, each of which is expected to satisfy the firms ongoing need for additional aluminum exclusion capacity. the three machines A B & C are equally risky. the firm plans to use a cost of capital of 11.8% to evaluate each of them. the initial investment and annual cash inflows over the life of each machine or shown in the following table.
need help with a, b, and c. image text in transcribed
image text in transcribed
corner of the data table below in order to copy its contents into a spreadsheet.) Initial investment (CF) Year (t) 1 Machine A Machine B Machine C $91,100 $64,600 $99,500 Cash inflows (CF) $13,000 $9,800 $31,000 13,000 20,200 31,000 13,000 29,800 31,000 13,000 39,400 31,000 13,000 31,000 13,000 2 3 4 5 6 alculate the NPV for each machine over its life. Rank the machines in descending order on th The net present value for machine A is $ (Round to the nearest cent.) 6 13,000 a. Calculate the NPV for each machine over its life. Rank the machines in descending order on the basis of NPV. b. Use the annualized net present value (ANPV) approach to evaluate and rank the machines in descending order on the basis of ANPV. c. Compare and contrast your findings in parts (a) and (b). Which machine would you recommend that the firm acquire? a. The net present value for machine Ais $. (Round to the nearest cent)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Legal Environment Today Summarized Case Edition

Authors: Roger LeRoy Miller

8th Edition

130526276X, 978-1305279407, 1305279409, 978-1305704930, 1305704932, 978-1305262768

More Books

Students also viewed these Finance questions

Question

How to solve maths problems with examples

Answered: 1 week ago