Kerwin industhes is deciding wheter to automate one phote of at prebuction process. The manutachurng equpmert has a six-year hte and wil cost $900,000 Projected net cash inflows arh as follows CClick the loon to vied the prelected net cash irhows. (Cick twe icon to viev the present value tabie.) (Click the ison to viow the present value antwity table). (Click the icon to view the future value table). (Clok the icon lo view the Aature value annuly table) Read the reosiremerts Requirement 1. Compute this projech's NoV using Korwin indutries. 14% harob rate. Should Korwir indutties irvest in the equpment? Why or wty not? Net present vake Requirements 1. Compute this project's NPV using Kerwin Industries' 14% hurdle rate. Should the company invest in the equipment? Why or why not? 2. Kerwin Industries could refurbish the equipment at the end of six years for $104,000. The refurbished equipment could be used one more year, providing $75,000 of net cash inflows in Year 7 . In addition, the refurbished equipment would have a $53,000 residual value at the end of Year 7 . Should Kerwin Industries invest in the equipment and refurbish it after six years? Why or why not? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Why or why not gn for negative Reference hd will cost $900,0 Why or why not? gn for negative net Reference Reference Kerwin industhes is deciding wheter to automate one phote of at prebuction process. The manutachurng equpmert has a six-year hte and wil cost $900,000 Projected net cash inflows arh as follows CClick the loon to vied the prelected net cash irhows. (Cick twe icon to viev the present value tabie.) (Click the ison to viow the present value antwity table). (Click the icon to view the future value table). (Clok the icon lo view the Aature value annuly table) Read the reosiremerts Requirement 1. Compute this projech's NoV using Korwin indutries. 14% harob rate. Should Korwir indutties irvest in the equpment? Why or wty not? Net present vake Requirements 1. Compute this project's NPV using Kerwin Industries' 14% hurdle rate. Should the company invest in the equipment? Why or why not? 2. Kerwin Industries could refurbish the equipment at the end of six years for $104,000. The refurbished equipment could be used one more year, providing $75,000 of net cash inflows in Year 7 . In addition, the refurbished equipment would have a $53,000 residual value at the end of Year 7 . Should Kerwin Industries invest in the equipment and refurbish it after six years? Why or why not? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Why or why not gn for negative Reference hd will cost $900,0 Why or why not? gn for negative net Reference Reference
