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Please answer this one question for me and label. thanks! which image is not clear? are you able to zoom in? CADE WIN) Your answer
Please answer this one question for me and label. thanks!
which image is not clear? are you able to zoom in?
CADE WIN) Your answer is partially correct. Try again. Linkin Corporation is considering purchasing a new delivery truck. The truck has many advantages over the company's current truck (not the least of which is that it runs). The new truck would cost $55,000. Because of the increased capacity, reduced maintenance costs, and increased fuel economy, the new truck is expected to generate cost savings of $8,600. At the end of 8 years, the company will sell the truck for an estimated $27,000. Traditionally the company has used a rule of thumb that a proposal should not be accepted unless it has a payback period that is less than 50% of the asset's estimated useful ife. Larry Newton, a new manager, has suppested that the company should not rely solely on the payback approach, but should also employ the net present value method when evaluating new projects. The company's cost of capital is 8%. Click here to view PV table Compute the cash payback period and net present value of the proposed investment. (If the net present value is negative, use either a negative sign preceding the number ag -45 or parentheses ep (45). Round answer for present value to 0 decimal places, e.g. 125. Round answer for Payback period to 1 decimal place, e.g. 10.5. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Cash payback period 6.5 years Net present value 2962 (b) Does the project meet the company's cash payback criteria? No Does it meet the net present value criteria for acceptance? Yes Your answer is partially correct. Try again. Doug's Custom Construction Company is considering three new projects, each requiring an equipment investment of $23,100. Each project will last for 3 years and produce the following net annual cash flows. Year BB 1 $7,350 $10,500 $13,650 2 9,450 10,500 12,600 3 12,600 10,500 11,550 $29,400 $31,500 $37,800 The equipment's salvage value is zero, and Doug uses straight line depreciation, Doug will not accept any project with a cash payback period over 2 years. Doug's required rate of return is 12%. Click here to view PX table Compute each project's payback period. (Round swers to 2 decimal places, ... 15.25.) MA years BE years years www your answer is partially correct. Try again Hillsong Inc, manufactures snowsuits. Hillsong is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased five years ago at a price of $1.8 million six months ago Hillsong spent $55,000 to keep it operational. The existing sewing machine can be sold today for $245,788. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7: Year 1 2 3 4 $389,300 399,900 410,000 425,500 432,400 434,500 438,000 5 6 7 The new sewing machine would be depreciated according to the declining balance method at a rate of 20%. The salvage value is expected to be $379,400. This new equipment would require maintenance costs of $98,800 at the end of the fifth year. The cost of capital is 9%. Click here to view Py_table. Use the net present value method to determine the following: (If net present value is negative then enter with negative sign preceding the number ..-45 or parentheses .. (45). Hound present value answer to decimal places, e.9. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided) Calculate the represent value Net present value Jane's Auto Care is considering the purchase of a new tow truck. The garage doesn't currently have a tow truck, and the $59,970 price tag for a new truck would represent a major expenditure. Jane Austen, owner of the garage, has compiled the estimates shown below in trying to determine whether the tow truck should be purchased Initial cost $59,970 Estimated useful life 8 years Net annual cash flows from towing $8,020 Overhaul costs (end of year 4) $6,000 Salvage value $12,000 Jane's good friend, Rick Ryan, stopped by. He is trying to convince Jane that the tow truck wil have other benefits that ane hat even considered. First, he says, cars that need towing need to be fored. Thus, when Jane tows them to her facility, her repair revenues will increase. Second, he notes that the tow truck could have a plow mounted on it, thus saving ane the cost of plowing her parking lot. Rick will give her a used plow blade for free if ane will plow Rick's driveway) Third, he notes that the truck will generate goodwill, people who are rescued by lane's tow truck will feel grateful and might be more incined to use her service station in the future or buy gas there. Fourth, the tow truck will have "Jane's Auto Care on its doors, hood, and back tailgate-a form of free advertising wherever the tow truck goes. Rick estimates that a minimum, these benefits would be worth the following Additional anual net cash flows from repair work $3,010 Annual savings from plowing 740 Additional annual net cash flows from customer "goodwill 1,010 Additional annual net cash flows resulting from free advertising 740 The company's cost of capital is 9% Click here to view Py table. Your answer is partially correct. Try again. Calculate the net present value, ignoring the additional benefits described by Rick. (If the net present value is negative, use either a negative sign preceding the number ..-45 or parentheses (45) Round answer to decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present valve Should the tow truck be purchased? The tow truck should not be purchased Your answer is partially correct. Try again. Calculate the nat present value incorporating the additional benefits syagested by Rick (Ir the net present value is negative, use either a negative sign preceding the numbers.g.-45 or parentheses ... (45). Round answer to o decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided) Net present value Should the tow truck be purchased? Calculate the net present value, Incorporating the additional benefits suggested by Rick (If the net present value is negative, seether a negative sign preceding the number .g.-45 or parentheses .. (45). Round answer to o decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present value Should the tow truck be purchased? The tow truck should . be purchased Your answer is incorrect. Try again Suppose Rick has been overly optimistic in his assessment of the value of the additional benefits. At a minimum, how much would the additional benefits have to be worth in order for the project to be accepted (Round answer to o decimal places, e.g. 125.) Present value of the intangible benefits Click if you would like to show Work for this questioni Open Show Work Step by Step Solution
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