On January 11, 2023, the finance committee of Mada Plastic Molding Company (MPMC) met to evaluate eight capital-budgeting projects. They had four mutually exclusive profit projects to consider. 2. Projects C and D concerned renting computer facilities for customer billing and inventory control. Project C involved outsourcing bookkeeping and billing, while Project D offered similar services and an inventory control system. Both projects had one-year time frames with different cash flow Project C involves the evaluation of a customer billing system proposed by Advanced Computer Corporation. Under this system, all the bookkeeping and billing tasks currently performed by MPMC's accounting department would be outsourced to Advanced Computer Corporation. In addition to cost savings in bookkeeping, Advanced would provide a more efficient billing system and perform credit analysis of delinquent customers, which could be used for future in-depth credit analysis. Project C is a one-year initiative and aims to improve MPMC's customer billing and credit analysis processes. Here are the cash flows associated with Project C: - Year 0: Initial investment of $8,000 - Year 1: Cash inflow of $11,000 In Year 0, MPMC would make an initial investment of $8,000 to implement the customer billing system proposed by Advanced Computer Corporation. In Year 1, the project is expected to generate a cash inflow of $11,000, representing the cost savings and efficiency gains achieved through the outsourcing of these services. The decision regarding Project C involves evaluating whether the benefits of outsourcing billing and credit analysis to Advanced Computer Corporation outweigh the initial investment and ongoing costs. It's important to consider factors such as the quality of service, cost savings, and the impact on overall business operations. MPMC needs to determine whether this project aligns with its goals for improving billing processes and customer credit analysis. Project D, proposed by International Computer Corporation, involves a billing system similar to the one offered by Advanced Computer Corporation in Project C, but it also includes an inventory control system. The billing system would handle bookkeeping and billing tasks currently managed by MPMC's accounting department. Additionally, the inventory control system would track all raw materials and parts in stock, automatically reordering when necessary. This feature aims to reduce the likelihood of material stockouts, which had become more frequent over the past three years. Project D is also a one-year initiative designed to enhance billing processes and inventory control. Here are the cash flows associated with Project D: - Year 0: Initial investment of $20,000 - Year 1: Cash inflow of $25,000 In Year 0, MPMC would need to make an initial investment of $20,000 to implement the billing and inventory control system proposed by International Computer Corporation. In Year 1, the project is expected to generate a cash inflow of $25,000, reflecting the cost savings and operational efficiency improvements resulting from the new system. Project D presents an opportunity for MPMC to streamline its billing processes and improve inventory control, potentially reducing costs and minimizing the risks associated with material steckouts. The company needs to assess whether the benefits, cost savings, and operational improvements associated with this project justify the initial investment. The decision involves evaluating the overall impact on MPMC's business operations and goals related|to billing and inventory management. What are the NPV, PI, and IRR values for Projects C and D? Which project should be chosen? Does the choice change if capital constraints are taken into account, and if so, what return on the marginal $12,000 not used in Project C would make the two projects equally attractive? On January 11, 2023, the finance committee of Mada Plastic Molding Company (MPMC) met to evaluate eight capital-budgeting projects. They had four mutually exclusive profit projects to consider. 2. Projects C and D concerned renting computer facilities for customer billing and inventory control. Project C involved outsourcing bookkeeping and billing, while Project D offered similar services and an inventory control system. Both projects had one-year time frames with different cash flow Project C involves the evaluation of a customer billing system proposed by Advanced Computer Corporation. Under this system, all the bookkeeping and billing tasks currently performed by MPMC's accounting department would be outsourced to Advanced Computer Corporation. In addition to cost savings in bookkeeping, Advanced would provide a more efficient billing system and perform credit analysis of delinquent customers, which could be used for future in-depth credit analysis. Project C is a one-year initiative and aims to improve MPMC's customer billing and credit analysis processes. Here are the cash flows associated with Project C: - Year 0: Initial investment of $8,000 - Year 1: Cash inflow of $11,000 In Year 0, MPMC would make an initial investment of $8,000 to implement the customer billing system proposed by Advanced Computer Corporation. In Year 1, the project is expected to generate a cash inflow of $11,000, representing the cost savings and efficiency gains achieved through the outsourcing of these services. The decision regarding Project C involves evaluating whether the benefits of outsourcing billing and credit analysis to Advanced Computer Corporation outweigh the initial investment and ongoing costs. It's important to consider factors such as the quality of service, cost savings, and the impact on overall business operations. MPMC needs to determine whether this project aligns with its goals for improving billing processes and customer credit analysis. Project D, proposed by International Computer Corporation, involves a billing system similar to the one offered by Advanced Computer Corporation in Project C, but it also includes an inventory control system. The billing system would handle bookkeeping and billing tasks currently managed by MPMC's accounting department. Additionally, the inventory control system would track all raw materials and parts in stock, automatically reordering when necessary. This feature aims to reduce the likelihood of material stockouts, which had become more frequent over the past three years. Project D is also a one-year initiative designed to enhance billing processes and inventory control. Here are the cash flows associated with Project D: - Year 0: Initial investment of $20,000 - Year 1: Cash inflow of $25,000 In Year 0, MPMC would need to make an initial investment of $20,000 to implement the billing and inventory control system proposed by International Computer Corporation. In Year 1, the project is expected to generate a cash inflow of $25,000, reflecting the cost savings and operational efficiency improvements resulting from the new system. Project D presents an opportunity for MPMC to streamline its billing processes and improve inventory control, potentially reducing costs and minimizing the risks associated with material steckouts. The company needs to assess whether the benefits, cost savings, and operational improvements associated with this project justify the initial investment. The decision involves evaluating the overall impact on MPMC's business operations and goals related|to billing and inventory management. What are the NPV, PI, and IRR values for Projects C and D? Which project should be chosen? Does the choice change if capital constraints are taken into account, and if so, what return on the marginal $12,000 not used in Project C would make the two projects equally attractive