Pina Colada Manufacturing Company is considering three new projects, each requiring an equipment irivestment of $25,600. Each project will last for 3 years and produce the following cash flows. The salvage value for each of the projects is zero. Pina Colada uses straight-line depreciation. Pina Colada will not accept any project with a payback period over 2.2 years. Pina Colada's minimum required rate of return is 12%. Click here to view PV tables. (a) Compute each project's payback period: (Round answers to 2 decimal places, e.9. 52.75.) Bridgeport Company has hired a consultant to propose a way to increase the company's revenues. The consultant has evaluated two mutually exclusive projects with the following information provided for each: Bridgeport Comparry uses a discount rate of 9$ to evaluate both projects. Click here to view PV tables. (a) Calculate the net present value of both projects: (Use the above table) (Round factor values to 5 decimal places, e.g. 1.2512.4 and final answers to 0 decimal places, e.g. 5,275.) Jennifer's Pet Shop is considering the purchase of a new delivery van. Jennifer Smith, owner of the shop, has compiled the following estimates in trying to determine whether the delivery van should be purchased: Jennifer's assistant manager is trying to convince Jennifer that the van has other benefits that she hasn't considered in the initial estimates. These additional benefits, including the free advertising the stores mame painted on the van's doors will provide. are expected to increase net cash flows by $520 each year. Pina Colada Compary is performling a post-audit of a prolect that was estimated to cost 5492.090, huve a useful hife ot 6 years with a rero salvage value, and result in annual net cash flows of 5118,000 per yeac. The comparfy's fequired rate of return is 103 , After the ifvestrment was in operation for a year, revied figures indicate that it actually cost 5538.000, will have a 9 -year useful Defe, and will produce annaal net canhflows of 599.000. The present value of an annuity of 1 for 6 years at 1053 is 4.35526 and for 9 years is 5.75902 Click here to view PV tables. (a) Calculate the net present yalue based on the original estimates. (F cor calculation purposes, use 5 decimal phices as diuniayed in the factor toble previded. Reund answer to 0 decienal places, e 3,5,275J Net pretent value 5 Bridgeport Dogsy, Inc produces and sells corn dogs. The corn dogs are dipped by hand. Austin Beagle, production manager, is considering purchasing a machine that will make the corn dogs. Austin has shopped for machines and found that the machine he wants will cost $239,600. In addition, Austin estimates that the new machine will increase the company's annual net cash flows by $36,900. The machine will have a 12-year useful life and no salvage value. Click here to view PV tables. (a) Calculate the cash payback period, (Round answer to 2 decimal ploces, es. 15.21.) Cash payback period vears eTextbook and Media Attempts: 0 of 5 used (b)
