Finance

The jury Corporation recently made a decision to reject an investment project. The rejected project had a life of 16 years and a net present value (NPV) of -$12,000. The project was expected to produce cash inflows of 55,000 in year 1, $7,000 in year 2, none in years 3 and 4, and $10,000 per years 5 through 14. Jury Corporation has a WACC of 13%. What is the cost of this rejected investment project? Jury would like for the project to add at least $10,000 of value to the firm. What is the maximum that Jury should pay for this project in order for the produce a NPV of $10,000? The Imperial Corporation is considering replacing an old asset with a new asset. The new asset has a price of $165,000. The old asset has a book value of $40,000 and will be sold for 12% The new asset, if acquired, would be operative for another 11 years. Depreciation on the new asset would be $15,000 per year for each year for the next 11 years. Depreciation on the old asset, if it is retained, would be $3, 500 per year for each of the next 11 years. The old asset would increase revenue by $1,000 each year for the next 11 years and would increase operating expenses by $4,000 each year for the next 11 years. The new asset would increase revenue by $2,000 each year for the next 11 years. The new asset would also decrease operating expenses by $20,000 each year for the next 11 years. Calculate the net cost of the new asset (i.e. factor in the proceeds from the sale of the old asset). Calculate the incremental cash inflows that the new asset would produce, over and above those produced by the old asset. Should Imperial replace the old asset with the news asset? Support your response with either a NPV analysis or an IRR analysis