Please see attached financial accounting problems...

Problem #1 The following table shows two schedules of prospective operating cash inflows, each of which requires the same net initial investment of $10,000 for a new system now: Year 1 2 3 4 5 Total Annual Cash Inflows Plan A Plan B $1,000 $5,000 2,000 4,000 3,000 3,000 4,000 2,000 5,000 1,000 $15,000 $15,000 The required rate of return is 6%. All cash inflows occur at the end of each year. The initial investment has a five-year life with $0 residual value at the end of the fifth year. Compute the following (show your computation) a. Net present value b. Payback period c. Internal rate of return (use Excel) d. Accounting rate of return based on net initial investment (Assume straight-line depreciation.) e. Which plan is more desirable using these four methods? Explain. (use the cutoff period of 3 years for payback period.) Problem #2 show your computation A company must make a mutually exclusive choice between two different IT investment alternatives (i.e., A or B). Assume a discount rate of 15 percent. The initial cost and cash flow from the two projects are given in the table below: a. b. What are the NPVs for Alternatives A and B? Which alternative should be selected based on NPV? c. What are the PIs for Alternatives A and B? d. Which alternative should be selected based on PI alone? Alternative A Alternative B Initial cost $60,000 $45,000 Cash flow Year 1 $10,000 $70,000 Cash flow Year 2 $40,000 $20,000 Cash flow Year 3 $90,000 $5,000 1 Problem #3 show your computation. A cutting-edge IT company is facing a classic decision as to which of three mutually exclusive choices they should select in the development of the next generation of programming software programs. They have three choices: to allow their internal IT staff to do the program, use some internal staff and some outsourced staff, or to completely outsource the program they are planning. If they have a discount rate of 10 percent and the initial cost and cash flows given in the table below, which should they choose? Use whatever analysis you want to defend your IT investment decision. Internal IT program Mixed internal & outsource program Outsource program Initial cost $130,000 $150,000 $220,000 Cash flow Year 1 $10,000 $30,000 $70,000 Cash flow Year 2 $50,000 $60,000 $70,000 Cash flow Year 3 $60,000 $70,000 $70,000 Cash flow Year 4 $60,000 $50,000 $70,000 Problem # 4 XYZ Company manufactures electronic components. The company has developed a device that management believes could be modified and marketed as an electronic game. The following information for the new product was developed from the best estimates of the marketing and production managers. Annual sales volume Selling price Cash variable costs Cash fixed costs Investment required Project life 1,000,000 units $10 per unit $4 per unit $2,000,000 per year $12,000,000 5 years At the end of the five-year useful life, there will be a $0 disposal value. XYZ's required rate of return on this project is 14%. The electronic game industry is a new market for XYZ, and management is concerned about the reliability of the estimates. The controller has proposed applying sensitivity analysis to selected factors. Required: 1. What is the net present value of this investment proposal? (show your computation) 2. What is the effect on the net present value of the following two changes in assumptions? (Treat each item independently of the other, and show your computation). a. 10% reduction in the selling price b. 10% increase in the variable cost per unit 3. Discuss how management would use the data developed in requirements 1 and 2 in its consideration of the proposed capital investment. 2