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Orange Company wants to buy a machine that will cost $75.000 and will last for 6 years. This machine will reduce Blue's labor costs by

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Orange Company wants to buy a machine that will cost $75.000 and will last for 6 years. This machine will reduce Blue's labor costs by $30,000 per year. At the end of the 6-year period, the company will sell the machine for its salvage value of $10,000, Blue Company requires a minimum pretax return of 10% on all investment projects. What is the Net Present Value of the investment in the new machine? (Dollar values with parentheses around them represent a Negative NPV.) O $9,350 ($134,360) $61,290 ($650) Purple Company wants to buy a machine that will cost $50,000 and will last for five years. This machine will increase net cash inflows by $15,000 per year. At the end of the five-year period, the machine will have no salvage value. Purple Company's required rate of return is 6% on all investment projects. What is the machine's NPV? (Negative NPV is shown is parentheses around the number) ($13,180) $13.180 ($26.140) $26.140 The following includes the cash flows for a capital investment being considered by the company Year Investment (cash outflow) $ 10.000 1 2 3 $ 1.000 4 5 Cash Inflow $2.000 $5,000 $2,000 $ 4,000 $1,000 $1,000 $ 1.000 $1,000 $1,000 6 7 8 9 What is the payback period for this capital investment? 4 years 0 3.25 years O 3 years O 3.5 years Hercules Company is deciding whether it is better to buy machine X or machine Y. Machine X costs $15,000, has a useful life of 10 years, and will reduce operating costs by $3,000 per year. Machine Y costs $20,000, has a useful life of 8 years, and will reduce operating costs by $5,000 per year. According to the payback method, what is the difference in the payback periods for Machine X and Machine ? Machine Y takes 1 year longer to pay back than Machine X Machine takes 2 years longer to pay back than Machine X Machine X takes 2 years longer to pay back than Machine Y Machine X takes 1 year longer to pay back than Machine Y

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