Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Jones Distributors is undertaking an employee training pregam that with redouse workplace injuries. The benefits of the progrm are expected wo last for the nest.

image text in transcribed
image text in transcribed
Jones Distributors is undertaking an employee training pregam that with redouse workplace injuries. The benefits of the progrm are expected wo last for the nest. four years and will produce savings from reduced sick pay and medical coss of $160,000 in year 1.$180,000 in year 2,$200,000 in year 3 , and $220,5000 in yeas 4. Jones is deciding between two firms to hire to provide the trainine Finm thoue charges $360,000 for the training program and provides yearly alminidundive assistance for its ongoing implementation. Firm Gold charges $280,500 for the same program but.Jones will have to cover the yearly admitivistrative cont of 520,900 on its own. Jones' weighted average cost of capital is 11%. Jones is a thon-proft corporation and thus pays no taxes. a. Estimate the cash flows for the program if Jones uses Furm Blue and WI Jones uses Firm Gold and then calculate the following for both: i. Payback period ii. Discounted payback period iii. Net present value iv. Internal rate of return 5. Jones Distributors is undertaking an employee training program that will reduce workplace injuries. The benefits of the program are expected to last for the next four years and will produce savings from reduced sick pay and medical costs of $160,000 in year 1,\$180,000 in year 2,\$200,000 in year 3, and $220,000 in year 4. Jones is deciding between two firms to hire to provide the training. Firm Blue charges $360,000 for the training program and provides yearly administrative assistance for its ongoing implementation. Firm Gold charges $280,000 for the same program but Jones will have to cover the yearly administrative cost of $20,000 on its own. Jones' weighted average cost of capital is 11%. Jones is a non-profit corporation and thus pays no taxes. a. Estimate the cash flows for the program if Jones uses Firm Blue and if Jones uses Firm Gold and then calculate the following for both: i. Payback period ii. Discounted payback period iii. Net present value iv. Internal rate of return v. Profitability index

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 Oxford Handbook Of Sovereign Wealth Funds

Authors: Douglas J. Cumming, Geoffrey Wood, Igor Filatotchev, Juliane Reinecke

1st Edition

0198754809, 978-0198754800

More Books

Students also viewed these Finance questions