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Please complete and show computes for blue boxes Glacier Creck Textiles is planning to purchase new manufacturing equipment. The equipment has an acquisition cost of
Please complete and show computes for blue boxes
Glacier Creck Textiles is planning to purchase new manufacturing equipment. The equipment has an acquisition cost of $100,000, an estimated useful iife of five years and no residual value. The company uses a 12% rate of return to evaluate capital projects. The cash flows for the five years: Requirements 1. Compute the accounting rate of return. 2. Compute the net present value of the investment using Excel's NPV function. 3. Compute the profitability index, rounded to two decimal places 4. Compute the internal rate of return of the investment using Excel's IRR function. Display to two decimal places, but do not round. Evaluate Glacier Creek Textlies' new manufacturing equipment. \begin{tabular}{|l|c|c|} \hline Average anmual cperating income & Averageamountlnvested & AccountingRateofReturn-ARR \\ \hline & & \\ \hline \end{tabular} Requlrement 2 Compute the net present value of the investment using Exceis NPV function \begin{tabular}{|r|r|} \hline Present value of net cash flows & \\ \hline Cost of asset & \\ \hline Net Present Value \\ \hline \end{tabular} Requirement 3 Compute the profitablity index, rounded to two decimal places. Profitability index Requirement 4 Compute theinternal rate of return of the investment using Excel'siRR function. Display to two decimal places, but do not round. \begin{tabular}{|r|} \hline IRR \\ \hline \end{tabular} Note: IRR requires a negative amount for the investment Step by Step Solution
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