Question 1 of 4 - /5 View Policies Current Attempt in Progress Wayne Company is considering a long-term investment project called ZIP ZIP will require an investment of $128,838. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $79.400 and annual cash outflows would increase by 540,000. Compute the cash payback period. (Round answer to 2 decimal places, es, 10.52.) Cash payback period years e Textbook and Media Save for Later Attempts:0 of 3 used Submit Answer Using multiple attempts will impact your score 5% score reduction after attempt 2 Current Attempt in Progress Hillsong Inc. manufactures snowsuits. Hillsong is considering purchasing a new sewing machine at a cost of $245 million. Its existing machine was purchased five years ago at a price of $1.8 million; six months ago Hillsong spent $55,000 to keep it operational. The existing sewing machine can be sold today for $240,438. The new sewing machine would require a one-time, $85,000 training cost Operating costs would decrease by the following amounts for years 1 to 7: Year 1 $390,900 2 399,800 3 410.100 4 425,400 5 434,000 6 434,900 7 436,400 The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%, The salvage value is expected to be $379,100. This new equipment would require maintenance costs of $94.000 at the end of the fifth year. The cost of capital is 9% Click here to view PV table Use the net present value method to determine the following: Ofnet present value is negative then enter with negative sign preceding the number eg.:45 or parentheses e.3. (45). Round present value answer to O decimal places, es. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided) Calculate the net present value Net present value $ Determine whether Hillsong should purchase the new machine to replace the existing machine? e Textbook and Media Attempts: 0 of 3 used Submit Answer Sowetoro Using multiple attempts will impact your score Score reduction ifter attempt BSU Inc. wants to purchase a new machine for $45,600, excluding $1,200 of installation costs. The old machine was bought five years ago and had an expected economic life of 10 years without salvage value. This old machine now has a book value of $1,900, and BSU Inc.expects to sell it for that amount. The new machine would decrease operating costs by $10,000 each year of its economic life. The straight-line depreciation method would be used for the new machine for a six-year period with no salvage value. Click here to view PV table (a) Determine the cash payback period. (Round cash payback period to 2 decimal places, eg. 10.53.) Cash payback period years (b) Determine the approximate internal rate of return. (Round answer to decimal places, eg. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Internal rate of return % (c) Assuming the company has a required rate of return of 7%, determine whether the new machine should be purchased The investment be accepted e Textbook and Media Tom Bat became a baseball enthusiast at a very early age. All of his baseball experience has provided him valuable knowledge of the sport, and he is thinking about going into the batting cage business. He estimates the construction of a state-of-the-art building and the purchase of necessary equipment will cost $840,000. Both the facility and the equipment will be depreciated over 12 years using the straight-line method and are expected to have zero salvage values. His required rate of return is 9% (present value factor of 7.1607). Estimated annual net income and cash flows are as follows: Revenue $350,500 Less: Utility cost $40,000 Supplies $8,000 Labor 141,000 Depreciation 70,000 Other 38,500 297,500 Net Income $53,000 For this investment, calculate TABLE 4 Present Value of an Annuity of 1 (n) Payments 49 59 69 79 89 99 10% 11% 12 159 1 .96154 .95238 .94340 0.93458 92593 91743 .90909 90090 .89286 86957 2. 1.88609 1,85941 1.83339 1.80802 1.78326 1.75911 1.73554 1.71252 1.69005 1.62571 3 2.77509 2.72325 2.67301 2.62432 2.57710 2.53130 2.48685 2.44371 2.40183 2.28323 4 3.62990 3.54595 3.46511 3.38721 3.31213 3.23972 3.16986 3.10245 3.03735 2.85498 5 4.45182 4.32948 4.21236 4 10020 3.99271 3.88965 3.79079 3.69590 3.60478 3.35216 6 5.24214 5.07569 4.91732 4.76654 4.62288 4.48592 4.35526 4.23054 4.11141 3.78448 7 6.00205 5.78637 5.58238 5.38929 5.20637 5.03295 4.86842 4.712204.56376 4.16042 8 6.73274 6.46321 6.20979 5.97130 5.74664 5.53482 5.33493 5.146124.96764 4.48732 9 7.43533 7.10782 6.80169 6.51523 6.24689 5.99525 5.759025.537055.32825 4.77158 10 8.11090 7.72173 7.36009 7.02358 6.71008 6.41766 6.14457 5.88923 5.650225.01877 11 8.76048 8.30641 7.88687 7.49867 7.13896 6.80519 6.49506 6,20652 5.93770 5.23371 12 9.38507 8.86325 8.38384 7.94269 7.53608 7.16073 6.81369 6.49236 6.19437 5.42062 13 9.98565 9.39357 8.85268 8.35765 7.90378 7.486907.10336 6.74987 6.42355 5.58315 14 10.56312 9.89864 9.29498 8.74547 8.24424 7.78615 7.36669 6.98187 6.62817 5.72448 15 11.11839 10.37966 9.71225 9.10791 8.55948 8.06069 7.60608 7.19087 6.81086 5.84737 16 11.65230 10.83777 10.10590 9.44665 8.85137 8.31256 7.82371 7.37916 6,97399 5.95424 17 12.16567 11.27407 10.47726 9.76322 9.12164 8.543638,02155 7.54879 7. 11963 6.04716 18 12.65930 11.68959 10.82760 10.05909 9.37189 8.755638.20141 7.701627.24967 6.12797 19 13.13394 12.08532 11.15812 10.33560 9.60360 8.950128.36492 7.839297.36578 6.19823 20 13.59033 12.46221 11.46992 10.59401 9.818IS 9.12855 8.51356 7.96333 746944 6.25933 ta) The net present value (Round answer to decimal places, ca 5.275) Net present value $