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Please see problem in first photo and blank cells need to be answered in second photo. LO 2, 3, 4,5 Capital Investment Decision: Comprehensive P4.

Please see problem in first photo and blank cells need to be answered in second photo. image text in transcribed
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LO 2, 3, 4,5 Capital Investment Decision: Comprehensive P4. Edge Com nological changes is what makes the company successful and feels that a machine intro- duced recently would fill an important need. The machine has an estimated useful life of four years, a purchase price of $250,000, and a residual value of $25,000. The company controller has estimated average annual net income of $11,250 and the following cash flows for the new machine: 1a: Net present value: ($26,895) V 11: Accounting rate of return 8.2% 1c Payback period: 3.7 years Cash Flow Estimates Year Cash Inflows $325,000 320,000 315,000 310,000 Cash Outflows $250,000 250,000 250,000 250,000 Net Cash Inflows $75,000 70,000 65,000 60,000 4 The company uses a 12 percent minimum rate of return and a three-year payback period for capital investment evaluation purposes

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