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Present Value of $1 Present Value of Annuity of $1.00 in Arrears 1. Calculate the following for the special-purpose eye-testing machine: a. Net present value
Present Value of $1 Present Value of Annuity of $1.00 in Arrears 1. Calculate the following for the special-purpose eye-testing machine: a. Net present value b. Payback period c. Internal rate of return d. Accrual accounting rate of return based on net initial investment e. Accrual accounting rate of return based on average investment 2. How would your computations in requirement 1 be affected if the special-purpose machine had a $12,000 terminal disposal value at the end of 10 years? Assume depreciation deductions are based on the $135,000 purchase cost and zero terminal disposal value using the straight-line method. Answer briefly in words without further calculations. Requirement 1. Calculate the following for the special-purpose eye-testing machine: a. Net present value (NPR) (Round interim calculations and your final answers to the nearest whole dollar. Use a minus sign or parentheses for a negative net present value.) The net present value is b. Payback period (Round your answer to two decimal places.) The number of years for the payback period is c. Internal rate of return (Round the rate to two decimal places, X.XX\%.) The internal rate of return (IRR) is % d. Accrual accounting rate of return based on net initial investment (Round interim calculations to the nearest whole dollar. Round the rate to two decimal places, X. XX%.) Based on the net initial investment, the accrual accounting rate of return (AARR) is %. e. Accrual accounting rate of return based on average investment (Round interim calculations to the nearest whole dollar. Round the rate to two decimal places, X.XX\%.) Based on average investment, the accrual accounting rate of return (AARR) is % using the straight-line method. Answer briefly in words without further calculations. NPV would Payback would IRR would AARR would under either method. because the disposal value because the disposal value because the disposal value because the disposal value
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