Need help with exercise 14-28

Please give details on calculations

Thanks

3. should be preferred scenario invest in the project? d? 4. How much did the company in c Scenario What is the average net income earned by the project in OBJECTIVE 3 Exercise 14-28 Net Present value Each of the scenarios independent. Assume that all cash flows are after-tax cash following is flows, welding system. The cash a. Southward Manufacturing is considering the purchase of a new b. benefits will per The system costs $2,250,000 and will last 10 years. Day is interested in investing in a women's specialty shop. The cost of the investment is S180,000. She estimates that the return from owning her own shop will be year. She estimates that the shop will have a useful life of 6 years, o c, Goates Company calculated the NPV of a project and found it to be S21,300. The project's life was estimated to be 8 years. The required rate of return used for the NPV calculation was 10% The project was expected to produce annual after-tax cash flows of S45,000. Required 1. Compute the NPV for Southward Manufacturing, assuming a discount rate of 12% Should the company buy the new welding system? 2. CONCEPTUAL CONNECTION Assuming a required rate of return of 8%, calculate the NPV for Kaylin Day's investment. Should she invest? What if the estimated return was S45,000 per year? Would this affect the decision? What does this tell you about your analysis? 3. What was the required investment for Goates Company's project? no mnre AA F arriea 14.20 Internal Rnte nf Retain