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For discount factors use Exhibit 1 2 B - 1 and Exhibit 1 2 B - 2 . Hunt Inc. intends to invest in one
For discount factors use Exhibit B and Exhibit B
Hunt Inc. intends to invest in one of two competing types of computeraided manufacturing equipment: CAM X and CAM Y Both CAM X and CAM Y models have a project life of
years. The purchase price of the CAM X model is $ and it has a net annual aftertax cash inflow of $ The CAM model is more expensive, selling for
$ but it will produce a net annual aftertax cash inflow of $ The cost of capital for the company is
Required:
Calculate the NPV for each project. Round present value calculations and your final answers to the nearest dollar.
CAM X: $
CAM Y: $
Which model would you recommend using NPV
Select the IRR for each project.
CAM :
CAM Y:
Which model would you recommend using IRR?
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