Quary Company is considering an investment in machinery with the following information. The company's required rate...
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Quary Company is considering an investment in machinery with the following information. The company's required rate of return is 12%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Initial investment $ 200,000 Useful life 9 years Materials, labor, and overhead (except depreciation) Depreciation-Machinery $ 45,000 20,000 Salvage value $ 20,000 Expected sales per year 10,000 units a. Compute the investment's net present value. $ 10 b. Using the answer from part a, is the investment's internal rate of return higher or lower than 12%? Hint: It is not necessary to compute the IRR to answer this question. Selling, general, and administrative expenses Selling price per unit 5,000 Complete this question by entering your answers in the tabs below. Required A Required B Compute the investment's net present value. (Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar.) Years 1-9 Year 9 salvage Totals Present Value of Net Cash Flows x Present Value = Net Cash Flows = Required A Required B > Quary Company is considering an investment in machinery with the following information. The company's required rate of return is 12%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Initial investment $ 200,000 Useful life 9 years Materials, labor, and overhead (except depreciation) Depreciation-Machinery $ 45,000 20,000 Salvage value $ 20,000 Expected sales per year 10,000 units a. Compute the investment's net present value. $ 10 b. Using the answer from part a, is the investment's internal rate of return higher or lower than 12%? Hint: It is not necessary to compute the IRR to answer this question. Selling, general, and administrative expenses Selling price per unit 5,000 Complete this question by entering your answers in the tabs below. Required A Required B Compute the investment's net present value. (Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar.) Years 1-9 Year 9 salvage Totals Present Value of Net Cash Flows x Present Value = Net Cash Flows = Required A Required B >
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