Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $17,000 for 910 shares of Malti Company's common stock. She recelved a $701 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $16,000. Kathy would like to earn a return of at least 9% on all of her investments. She is not sure whether the Malti Company stock provide a 9% return and would like some help with the necessary computations. Required: 1. Compute the net present value that Kathy earned on her investment in Malti Company stock, 2. Did the Malti Company stock provide a 9% return? Complete this question by entering your answers in the tabs below. Compute the net present value that Kathy eamed on her investment in Maiti Company stock. Note: Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whole dollar amount. Perit Industries has $175,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries' discount rate is 15%. Required: 1. Compute the net present value of Project A. Note: Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount. 2. Compute the net present value of Project B. Note: Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount. 3. Which investment altemative (ff either) would you recommend that the company accept? Nindhoek Mines, Limited, of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows would be associated with opening and operating a mine in the area: -Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth. The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company's required rate of return is 18%. Required: a. What is the net present value of the proposed mining project? b. Should the project be accepted? Complete this question by entering your answers in the tabs below. Wendell's Donut Shoppe is investigating the purchase of a new $42,800 donut-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $5,700 per year. In addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 2,500 dozen more donuts each year. The company realizes a contribution margin of $1.50 per dozen donuts sold. The new machine would have a six-year useful life. Required: 1. What would be the total annual cash inflows associated with the new machine for capital budgeting purposes? 2. What is the new machine's internal rate of return? Note: Round your final answer to the nearest whole percentage. 3. In addition to the data given previously, assume that the machine will have a $16,280 salvage value at the end of six years. Under these conditions, what is the internal rate of return? Note: Round your final answer to the nearest whole percentage. Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $102,990, including freight and installation. Henrie's estimated the new machine would increase the company's cash inflows, net of expenses, by $30,000 per year. The machine would have a five-year useful life and no salvage value. Required: 1. What is the machine's internal rate of return? Note: Round your answer to the nearest whole percentage. 2. Using a discount rate of 14%, what is the machine's net present value? interpret your results. 3. Suppose the new machine would increase the company's annual cash inflows, net of expenses, by only $27,770 per year. Under these conditions, what is the internal rate of return? Note: Round your answer to the nearest whole percentage. Required information [The following information applies to the questions displayed below.] Nick's Novelties, Incorporated, is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $300,000, have a fifteen-year useful life, and have a total salvage value of $45,000. The company estimates that annual revenues and expenses associated with the games would be as follows: equired: 1. Compute the payback period associated with the new electronic games. b. Assume that Nick's Novelties, Incorporated, will not purchase new games unless they provide a payback period of five years o ess. Would the company purchase the new games? Complete this question by entering your answers in the tabs below. A plece of labor-saving equipment has just come onto the market that Mitsui Electronics, Limited, could use to reduce costs in one of its plants in Japan. Relevant data relating to the equipment follow: Required: 1a. Compute the payback period for the equipment. 1b. If the company requires a payback period of four years or less, would the equipment be purchased? Complete this question by entering your answers in the tabs below. Compute the payback period for the equipment. Note: Round your answer to 1 decimal place. Gaston Company is considering a capital budgeting project that would require a $2,200,000 investment in equipment with a useful life of five years and no salvage value. The company's tax rate is 30% and its after-tax cost of capital is 12%. It uses the straight-line depreciation method for financial reporting and tax purposes. The project would provide net operating income each year for five years ac follows: Required: Compute the project's net present value. Winthrop Company has an opportunity to manufacture and sell a new product for a five-year period. To pursue this opportunity, the company would need to purchase a piece of equipment for $150,000. The equipment would have a useful life of five years and zero salvage value. It would be depreciated for financial reporting and tax purposes using the straight-line method. After careful study, Winthrop estimated the following annual costs and revenues for the new product: The company's tax rate is 30% and its after-tax cost of capital is 18%. Required: 1. Calculate the annual income tax expense that will arise as a result of this investment. 2. Calculate the net present value of this investment opportunity. Note: Round your final answer to the nearest whole dollar. Lander Company has an opportunity to pursue a capital budgeting project with a five-year time horizon. After careful study, Lander estimated the following costs and revenues for the project: The plece of equipment mentioned above has a useful life of five years and zero salvage value. Lander uses straight-line depreciation for financial reporting and tax purposes. The company's tax rate is 30% and its after-tax cost of copital is 13%. When the project concludes in five years the working caplal will be released for investment elsewhere within the company. Required: 1. Calculate the annual income tax expense for each of years 1 through 5 that will arise as a result of this investment opportunity. 2. Calculate the net present value of this investment opportunity. Note: Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whole dollar