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i need the answers please!! Dwight Donovan, the president of Stuart Enterprises, is considering two investment opportunities. Because of limited resources, be able to invest
i need the answers please!!
Dwight Donovan, the president of Stuart Enterprises, is considering two investment opportunities. Because of limited resources, be able to invest in only one of them. Project A is to purchase a machine that will enable factory automation; the machine is expe to have a useful life of four years and no salvage value. Project B supports a training program that will improve the skills of emplo operating the current equipment. Initial cash expenditures for Project A are $116,000 and for Project B are $42,000. The annual expected cash inflows are $44,810 for Project A and $14,415 for Project B. Both investments are expected to provide cash flow benefits for the next four years. Stuart Enterprises' desired rate of return is 6 percent. (PV of $1 and PVA of \$1) (Use appropriate factor(s) from the tables provided.) Required a. Compute the net present value of each project. Which project should be adopted based on the net present value approach? b. Compute the approximate internal rate of return of each project. Which one should be adopted based on the internal rate of ret. approach? Complete this question by entering your answers in the tabs below. Compute the net present value of each project. Which project should be adopted based on the net present value approach? (Round your final answers to 2 decimal places.) Dwight Donovan, the president of Stuart Enterprises, is considering two investment opportunities. Because of limited resources, be able to invest in only one of them. Project A is to purchase a machine that will enable factory automation; the machine is expe to have a useful life of four years and no salvage value. Project B supports a training program that will improve the skills of emplo operating the current equipment. Initial cash expenditures for Project A are $116,000 and for Project B are $42,000. The annual expected cash inflows are $44,810 for Project A and $14,415 for Project B. Both investments are expected to provide cash flow benefits for the next four years. Stuart Enterprises' desired rate of return is 6 percent. (PV of $1 and PVA of \$1) (Use appropriate factor(s) from the tables provided.) Required a. Compute the net present value of each project. Which project should be adopted based on the net present value approach? b. Compute the approximate internal rate of return of each project. Which one should be adopted based on the internal rate of ret. approach? Complete this question by entering your answers in the tabs below. Compute the net present value of each project. Which project should be adopted based on the net present value approach? (Round your final answers to 2 decimal places.) Step by Step Solution
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