Question 3 options:

N&N Inc., a local food processing company, is considering an opportunity to upgrade its current packaging machine for the next five years.

The existing machine was purchased five years ago for $50,000 and can be sold now for $30,000. Its resale value in five years will be $5,000. The purchase price for the new machine will be $110,000. In addition, the vendor of the new machine will charge $10,000 for shipping and installation. The resale value of the new machine in five years will be $30,000. The new machine will allow N&N to reduce inventories by $5,000, but the inventories will be restored to the current level at the end of five years. Both machines belong to a class with a CCA rate of 30 percent. N&N's tax rate is 35% and the cost of capital is estimated to be 20%. N&N estimates that the new machine will reduce operating expenses by $35,000 per year and increase revenues by $5,000 per year for five years. The new machine will be financed by a bank loan and interest payments for the loan are estimated to be 3,000 every year.

The discounted cashflows for period 0 (including all initial cashflows and changes in working capital) are?

Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (,). If solution is a negative number include a - sing before the number whiteout any space. For example : -1152

The discounted cashflows for period 5 (including all terminal cashflows and operative cashflows) are?

Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (,). If solution is a negative number include a - sing before the number whiteout any space. For example : -1152

The NPV of the replacement project is ?

Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (,). If solution is a negative number include a - sing before the number whiteout any space. For example : -1152

Should the company replace the equipment (yes or no)?