need help solving #2,3,4,5,7,910,11,20,26

2. What concept must be considered when looking at cash flows over several years for a long-term investment? Explain 3. What is meant by the term present value? 4. What is the formula used to calculate the present value of a future cash flow? Describe each component. 5. Describe the three steps required to evaluate investments using the net present value method. 6 How to most furms establish the rernirard rate nf return vised to calculate the net nocent valuin? 7. What is meant by the term internal rate of return? Explain the IRR decision rule? 8. For the purpose of calculating net present value and internal rate of return, do companies use the accrual basis of accounting? Explain. 9. Why might a firm choose to accept a long-term investment even if the net present value is below zero? 10. What might cause a manager to reject a long-term investment even though the net present value is positive? 11. Describe the two steps required to calculate net present value and internal rate of return when using Excel. 0. Present Value Calculations (Annuities). For each of the following independent scenarios, use Figure 8.10 in the appendix to calculate the present value of the cash flow described. Round to the nearest dollar. 1. $20,000 will be received at the end of each year for 6 years. The rate is 12 percent 2. $20,000 will be received at the end of each year for 6 years. The rate is 15 percent. 3. $20,000 will be received at the end of each year for 6 years. The rate is 7 percent. 4. $120,000 will be received at the end of each year for 4 years. The rate is 10 percent. 26. Payback Period Calculation. Heavy Manufacturing, Inc. plans to invest $160,000 in a new machine. Annual cash inflows from this investment will be $50,000, and annual cash outflows will be $10,000. Determine the payback period for this investment. 27. Net Present Value Analysis with Multiple Investments. A project requiring an investment of $40,000 today and $20,000 one year from today will result in cash savings of $8.000 per year for 15 years. Find the CHAPTER 8 HOW IS CAPITAL BUDGETING USED TO MAKE DECISIONS? 67 FIGURE 8.10 Present Value of a $1 Annuity Received at the End of Each Period for Periodis Note Factor Periode 115 1 2 1 2. 2010 LIST ITIES LE SHORT IS ET WORT SES LOW 7 E 651 GE 10 OL 1 Gm ch SE 1 13 HOSE E HO 16 WE 15 EDE ELS BUS 16 BE 17 5430 18 's WE WE EU 13158 SO ww. 23 TES VE HE et POSTI WS IN S LOWS LE Son 10 Date TL16 05 TU