Most Company has an opportunty to invest in one of two new projects Project Y requires a $340,000 investment for new machinery with a five-year life and no salvage value Project Z requires a $340,000 investment for new machinery with four-year life and no salvage value. The two projects yield the following predicted annual results. The company uses straight-line depreciation, and cash flows occur evenly throughout each year PV of 1.1. PVA and FVA 0f 51 Use appropriate factors from the tables provided) Project Pro $390.000 3312,90 Bales Direct material Direct labor Overhead Leloding depreciation Selling and administrative expenses Total expenses Pretak Inne Incone taken (30) Nut Inco 34,500 78,000 140,400 10,000 301.000 89,000 16,700 $ 62,300 39.000 45,00 140,400 20,000 30 200 59,00 17.340 40.460 4. Determine each project's not present value using 8% as the discount rate. Assume that cash flows occur at each year-end. (Round your intermediate calculations.) Prety Chart values are based on A PV faster Presente Delect Chart Present Value of an Annuity of 1 SIIS Net procent value Chart values are based on: 8% Arnout 125460 PV Factor 3.31211 - Presente $ 415538 Present Value of an Annuity of 1 $ 5 415 536 Net presenta Park Co. is considering an investment that requires immediate payment of $34,000 and provides expected cash inflows of $10,000 annually for four years. What is the investment's payback period? Payback Period Choose Denominator: Choose Numerator Payback Period Payback period Required information [The following information applies to the questions displayed below.) Following is information on an investment considered by Hudson Co. The investment has zero salvage value. The company requires a 3% return from its investments. Investment A1 $ (220,000) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 130,000 110,000 89,000 Compute this investment's net present value. (PV of $1, FV of $1, PVA of $1. and FVA of $1 (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places.) Cash Flow Present Value of 1 at 3% Present Value Year 1 Year 2 Year 3 Totals Amount invested Net present value Required information The following information applies to the questions displayed below.) Following is Information on an investment considered by Hudson Co. The investment has zero salvage value. The company requires a 3% return from its investments. Investment Al $ (220,000) Initial investment Expected net cash flows in Year 1 Year 2 Year 3 130,000 110,000 89,000 Assume that instead of a zero salvage value, as shown above, the investment has a salvage value of $34,500. Compute the investment's net present value. (PV of $1, FV of $1, PVA of $1. and FVA of $1 (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places.) Cash Flow Present Value of 1 at 3% Present Value Year 1 Year 2 Year 3 Totals Amount invested Net present value Following is Information on two alternative investments being considered by Jolee Company. The company requires a 10% return from its investments. (PV of $1, FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Project $(189,325) Projects $154,960) Initial investment Expected net cash flows in Year 1 Year 2 Year 3 Year 4 Year 5 39,000 53,000 84,295 95,400 69,000 45,000 47,000 61,000 74,000 26,000 a. For each alternative project compute the net present value. b. For each alternative project compute the profitability Index. If the company can only select one project, which should it choose? Complete this question by entering your answers in the tabs below. Required A Required B For each alternative project compute the net present value. Project A Initial Investment $ 189.325 Chart Values are Based on % Year Cash Inflow PV Factor Present Value 1 2 3 4 5 For each alternative project compute the net present value. Project A Initial Investment $ 189,325 Chart Values are Based on: Year Cash Infiow PV Factor Present Value 1 2 3 4 5 Initial Investment Year Cash Inflow Project B $ 154.960 X PV Factor Present Value 1 2 3 4 5 Required B Complete this question by entering your answers in the tabs below. Required A Required B For each alternative project compute the profitability Index. If the company can only select one project, which should it choose? Profitability Index Choose Denominator Choose Numerator: Profitability Index Profitability index Project A Project B If the company can only select one project, which should it choose?
