Please help me answer these problems.

Related Problem 1- Net Cost of Investment

The World Trade Center Company plans to acquire a new equipment costing P1.2Mln to replace the equipment that is now being used. The terms of the acquisition are 3/30, n/90. Freight charges on the new equipment are estimated at P23,000 and it will cost P14,000 to install. Special attachment to be used with this unit will be needed and will cost P36,000. If the new equipment is acquired, operations will be expanded and this will require additional working capital of P250,000. The old equipment had a net book value of P300,000 and will be sold for P180,000. If the new equipment is not purchased, the old equipment must be overhauled at a cost of P90,000. This cost is deductible for tax purposes in the year incurred. Tax rate is 35%.

Compute the net investment in the new equipment for decision-making purposes.

Related Problem 2 - Net Returns

The Paniqui Corporation is planning to add a new product line to its present business. The new product will require a new equipment costing P2.4Mln with a 5-year life, no salvage value. The following estimates are made available:

Annual Sales P12Mln Factory Overhead (excluding depreciation on new equipment) P1.3Mln

Materials 4.4Mln Selling & Administrative Expenses 2.1Mln

Labor 2.2Mln Income Tax Rate 40%

Compute the: 1. net income and 2. net cash inflows

Related Problem 3 - Payback Period: Even Cash Inflows

A project requires an investment of P600,000 with 5-years useful life, no salvage value, and uses straight line method of depreciation. Other data are: Expected Sales Revenue P2Mln; Out-of-Pocket Costs P1.6Mln; Tax Rate 40%.

Compute the payback period.

Related Problem 4 - Payback Period: Uneven Cash Inflows

An investment of P400,000 can bring in the following annual cash income, net of tax:

1^st year P40,000 4^th year P160,000

2^nd year 95,000 5^th year 86,000

3^rd year 85,000 6^th year 70,000

Compute the payback period.

Related Problem 5 - Net Present Value: Even Net Cash Inflows

An equipment costing P800,000 will produce annual net cash inflows of P250,000. At the end of its useful life of five years, the equipment will have a P20,000 salvage value. The desired rate of return is 14%.

Determine the net present value.

Related Problem 6 - Net Present Value: Uneven Net Cash Inflows

An equipment costing P680,000 with a residual value of P8,000 at its useful life of five years, is expected to bring the following net of cash inflows:

1^st year P350,000 4^th year P100,000

2^nd year 250,000 5^th year 50,000

3^rd year 150,000

Determine the net present value using a discount rate of 12%.

Related Problem 7 - Profitability Index

Millennium Corporation has P12Mln available money for investment. It has already evaluated several project proposals and now considers the following acceptable projects:

Project Cost of Investment PV Cost of Investment Net Present Value

A P5Mln P5.5Mln P500,000

B 6Mln 6.9Mln 900,000

C 4Mln 4.85Mln 850,000

D 3Mln 3.47Mln 470,000

Which project should the company invest?

Related Problem 8 - Internal Rate of Return: Even Cash Inflows

Twin Towers Company has the opportunity to buy a new equipment at P1Mln. The machine is estimated to have a useful life of 4 years, no salvage value and will yield an annual net cash inflow after tax of P375,000 during its economic life. The company's rate of return is 14%.

Determine the IRR.

Related Problem 9 - Internal Rate of Return: Uneven Cash Inflows

A new equipment costing P2.8Mln with P100,000 salvage value at the end of five years is expected to bring in the following cash inflows, net of tax:

Year 1 P1.2Mln Year 4 P600,000

Year 2 950,000 Year 5 500,000

Year 3 800,000

Determine the IRR.

Related Problem 10 - Discounted Payback Period

S & L Company is planning to invest P900,000 in a project which has an estimated life of 5 years, no salvage value. The expected after tax cash benefits are P400,000 in the first year, P350,000 in the second year, P250,000 in the third year and P200,000 in the fourth year and fifth year. The company's desired rate of return is 14%.

What is the discounted payback period?

Related Problem 11 - Lease or Purchase

Goco Corporation plans to operate a sight-seeing boat at the Manila Bay. In negotiating the purchase of a new vessel from Asian Yacht Club, Goco learned that Asian Yacht Club would lease the boat to them as an alternative to selling it outright. Through such an arrangement, Goco would not only pay the P4Mln purchase price, net of discount, but would lease the boat for P600,000 annually. Goco expects the boat to last for 20 years when its salvage value would have reached P100,000.

The annual net cash flows, excluding any consideration of lease payments and income tax is expected to be P1.3Mln. The company's income tax rate is 40% and its cost of capital is 12%. The straight-line method of depreciation is to be used.

Should Goco Corporation lease or buy the boat?