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plz ans the questions 10. Calculating IRR (LO5) What is the IRR of the following set of cash Page 331 flows? Year Cash Flow 0

plz ans the questions

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10. Calculating IRR (LO5) What is the IRR of the following set of cash Page 331 flows? Year Cash Flow 0 -$16.400 7.100 2 8.400 3 6,900 #15. Calculating Profitability Index (LO7) What is the profitability index for the following set of cash flows if the relevant discount rate is 10%? What if the discount rate is 15%? If it is 22%? Year Cash Flow 0 -$14,000 7,300 6,900 3 5,700 1. Relevant Cash Flows (LO1) White Oak Garden Inc. is looking at setting up a new manufacturing plant in London, Ontario, to produce garden tools. The company bought some land six years ago for $3.5 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $3.9 million. The company wants to build its new manufacturing plant on this land; the plant will cost $16.72 million to build, and the site requires $850.000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? Why? 13. Calculating Project OCF (LO3) Hubrey Home Inc. is considering a new three- year expansion project that requires an initial fixed asset investment of $3.9 million. The fixed asset falls into Class 10 for tax purposes (CCA rate of 30% per year), and at the end of the three years can be sold for a salvage value equal to its UCC. The project is estimated to generate $2,650,000 in Page 377 annual sales, with costs of $840,000. If the tax rate is 35%, what is the OCF for each year of this project? 14. Calculating Project NPV (LO2) In the previous problem, supposed the required return on the project is 12%. What is the project's NPV? 22. Project Evaluation (LO1, 2) Your firm is contemplating the purchase of a new $425,000 computer-based order entry system. The PVCCATS is $91,209, and the machine will be worth $30,000 at the end of the five-year life of the system. You will save $130,000 before taxes per year in order-processing costs and you will be able to reduce working capital by $60.000 (this is a one-time reduction). If the tax rate is 35%, what is the IRR for this project? 42. Comparing Mutually Exclusive Projects (LO4) Suppose in the previous problem that KISC always needs a conveyor belt system: when one wears out. it must be replaced. Which project should the firm choose now

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