Question
please as fast as possible see attached The Allied Group is considering two investments. The first investment involves a packaging machine, which can be used
please as fast as possible
see attached
The Allied Group is considering two investments. The first investment involves a packaging machine, which can be used to package garments for shipping orders to customers. The second possible investment would be a molding machine that would be used to mold the mannequin parts. The first possible investment is the packaging machine, which will cost $14,000. The second investment, the molding machine, would cost $12,000. The expected cash flows for the two projects are given below and the cost of capital to the firm is 15%. Both machines will be unusable after five years and have no salvage value. The net cash flows for the two possible projects are given in the following table: YearPackaging MachineMolding Machine 0 ($14000) ($12,000) 1 4100 3200 2 3300 2800 3 2900 2800 4 2200 2200 5 1200 2200 Questions: Address all of the following questions in a brief but thorough manner.
- Calculate each project's payback period.
- Calculate the NPV for each project.
- Calculate the IRR for each project.
- If the two projects are independent of each other, which projects, if any, should be selected? Explain why or why not.
- If the two projects are mutually exclusive, which project, if any, should be selected? Explain why.
The Allied Group is considering two investments. The first investment involves a packaging machine, which can be used to package garments for shipping orders to customers. The second possible investment would be a molding machine that would be used to mold the mannequin parts. The first possible investment is the packaging machine, which will cost $14,000. The second investment, the molding machine, would cost $12,000. The expected cash flows for the two projects are given below and the cost of capital to the firm is 15%. Both machines will be unusable after five years and have no salvage value. The net cash flows for the two possible projects are given in the following table: Year 0 1 2 3 4 5 Packaging Machine ($14000) 4100 3300 2900 2200 1200 Molding Machine ($12,000) 3200 2800 2800 2200 2200 Questions: Address all of the following questions in a brief but thorough manner. Calculate each project's payback period. Calculate the NPV for each project. Calculate the IRR for each project. If the two projects are independent of each other, which projects, if any, should be selected? Explain why or why not. If the two projects are mutually exclusive, which project, if any, should be selected? Explain why
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