Kern Co. is planning to invest in a two-year project that is expected to yield cash flows from operations of $75,000 in the first year and S100,000 in the second vear. Kern requires a return of 12 percent on all investment projects. The maximum that Kern should invest in this project is: (Ignore taxes) a. $146,675 b. $175,000 c. $156,228 d. $170,820 If the internal rate of return is lower than the minimum required rate of retum used to compute the net present value of a proposed machine purchase, then the net present value will be: a. positive. c. zero. b. negative. d. unknown. The Valentine Company has decided to buy a machine costing $20,000. Estimated cash savings from using the new machine amount to $5,000 per year. The machine will have no salvage value at the end of its useful life of six years. The machine's internal rate of return is closest to: a. 11% b. 12% c. 13% d. 14% A new machine costing $1,025,000 will yield cash savings of $225,000 each year for five years. In addition, it is anticipated that the new machine will increase productivity and that the company will experience an increase in contribution margin as a result. What annual dollar inflow from increased contribution margin would the company have to experience to make the machine an acceptable investment if the minimum desired rate of return is 7%? a. $82,917 b. $25,000 c. $18,711 d. $17,082 The payback period of an investment is useful in determining its: a. net present value. b. overall profitability. c. acceptability, if the company has an alternate future need for the invested funds