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Please help with questions 2 and 5. Thank you! 2 11.11 points eBook Hint Print References The management of Kunkel Company is considering the purchase
Please help with questions 2 and 5. Thank you!
2 11.11 points eBook Hint Print References The management of Kunkel Company is considering the purchase of a $33,000 machine that would reduce operating costs by $8,500 per year. At the end of the machine's five-year useful life, it will have zero salvage value. The company's required rate of return is 16%. Click here to view Exhibit 148-1 and Exhibit 148-2, to determine the appropriate discount factor(s) using table. Required: 1. Determine the net present value of the investment in the machine. 2. What is the difference between the total, undiscounted cash inflows and cash outflows over the entire life of the machine? Complete this question by entering your answers in the tabs below. Required 1. Required 2 Determine the net present value of the investment in the machine. (Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whole dollar amount. Use the appropriate table to determine the discount factor(s).) _;l 2 11.11 points eBook Hint Print References The management of Kunkel Company is considering the purchase ofa $33,000 machine that would reduce operating costs by $8,500 per year. At the end of the machine's five-year useful life, it will have zero salvage value. The company's required rate of return is 16%. Click here to view Exhibit 143-1 and Exhibit 148-2, to determine the appropriate discount factor(s) using table. Required: 1. Determine the net present value of the investment in the machine. 2. What is the difference between the total, undiscounted cash inflows and cash outflows over the entire life of the machine? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the difference between the total, undiscounted cash inows and cash outows over the entire life of the machine? (Any cash outows should be indicated by a minus sign.) 11.12 points Perit Industries has $130,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: Project A Project B Cost of equipment required 15 139,899 $ 9 Working capital investment required 5 6 $ 136,968 Annual cash in-Flows $ 21,680 $ 65,668 Salvage value of equipment in six years $ 8,186 $ 8 Life of the project 6 years 6 years The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries' discount rate is 17%. Click here to view Exhibit 14B-1 and Exhibit 148-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project A. (Enter negative values with a minus sign. Round your nal answer to the nearest whole dollar amount.) 2. Compute the net present value of Project B. (Enter negative values with a minus sign. Round your final answer to the nearest u-knla Anllgu- gnu-unsi- I Required: 5 1. Compute the net present value of Project A. (Enter negative values with a minus sign. Round your nal answer to the nearest whole dollar amount.) 2. Compute the net present value of Project B. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.) 2316136 3. Which investment alternative (if either) would you recommend that the company accept? 0 Answer is complete but not entirely correct. 1. Net present value project A $ (51,469) 0 2. Net present value project B $ 106,456 8 3. Which investment alternative (if either) would Pro'ect B a you recommend that the company accept? JStep by Step Solution
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