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BADM 32535 5LO1.1 Measurement Question: An investment of $100,000 promises an after-tax cash flow of $36,000 per year for 6 years with no residual value. 1. Find the investment's accounting rate of return. 2. Find the investment's payback period. 3. Find the investment's net present value at a 15 percent discount rate 4. Find the investment's internat rate of retum 5. Assuming the required rate of return on the investment is 15 percent, would you recommend this imvestment? Explain your answer using the results from your answers to questions a-d as appropriate. BADM 3253 SLO1.2 A company is considering two altemative methods of producing a new product. The relevant data concerning the alternatives are presented below. At the end of the useful life of whatever equipment is chosen the product will be discontinued. The company's tax rate is 50 percent and its cost of capital is 10 percent. 1. Calculate the Cash flow paying particular attention to the cash flow impact of taxes and depreciation, 2. Calculate the net present value of each altemative. 3. Calculate the internal rate of retum for each altemative. 4. If the company can implement only one of the two altematives, and there is no restriction on investment amount, which alternative should be chosen? Why? BADM 3253 SLO 1.3 Instructions: Analyze the attached Balance Sheet and Income statement, calculating and interpreting the following ratios, and making a conclusion on the financial position of the company addressing the 3 financial categories. Profitability Ratios (in \%): Return on equity, Return on assets, Return on invested capital, Profit margin, Gross margin Turnover-Control Ratios; Asset turnover, Fixed-asset turnover, Inventory turnover, Collection period (days), Days' sales in cash, Payables period Leverage and Liquidity Ratios: Assets to equity, Debt to assets, Debt to equity. Times interest earned, Current ratio, Acid test ratio