management accounting

(a) If there is any conflict between NPV and IRR, which one would you prefer and why? Give some examples of typical capital budgeting decisions? The expected annual net cash inflow from a project is $22,000 over the next 5 years. The required investment now in the project is $79.310. What is the internal rate of return on the project? b) Assume that all of the cash flows related to an investment in a supertanker have been estimated, except for its salvage value in 20 years. Using a discount rate of 12%, management has determined that the net present value of all the cash flows, except the salvage value is a negative $1.04 million. How large would the salvage value need to be to make this investment attractive? Bay Architects is considering a drafting machine that would cost $100,000, last four years, and provide annual cash savings of $10,000 and considerable intangible benefits each year. How large (in cash terms) would the intangible benefits have to be per year to justify investing in the machine if the discount rate is 14%? d) Denny Associates has been offered a four-year contract to supply the computing requirements for a local bank. Cost of computer equipment 250,000; Working capital required 20,000; Upgrading of equipment in 2 years 90,000; Salvage value of equipment in 4 years 10,000; Annual net cash inflow 1,20,000. The working capital would be released at the end of the contract. Denny Associates requires a 14% return. What is the net present value of the contract with the local bank