Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Santana Rey is considering the purchase of equipment for Business Solutions that would allow the company to add a new product to its computer furniture
Santana Rey is considering the purchase of equipment for Business Solutions that would allow the company to add a new product to its computer furniture line. The equipment is expected to cost $382,800 and have a six-year life and bo salvage value. Santana requires an 7% return on all investments.
Santana Rey is considering the purchase of equipment for Business Solutions that would allow the company to add a new product to in computer furniture line. The equipment is expected to cost \$382,800 and to have a six-year life and no salvage value. The equipment is expected to generate income of $15,639 and net cash flow of $77.848 in each year of its six-year life. Santana requires an 7% return on al investments. (PV of S1. FV. OI S1. PVA of S1. and FVA of S1) (Use appropriate factor(s) from the tables provided.) (Negative net present values should be indicated with a minus sign. Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest whole number.) Required: 1-a. Compute the peyback period for this equipment 1-b. Compute the net present value for this equipment. 1.c. Compute internal rate of return for this equipment. 2. If Santana requites investments to have paybeck periods of four years or less, should she itvest in this equipment? 3. H Santana requires investments to have at least an 7x internal tote of teturn, should the imvest in this equipment? Complete this question by entering your answers in the tabs below. Caerovese the payback period for this equpmert. Santana Rey is considering the purchase of equipment for Business Solutions that would allow the company to add a new product to ts computer furniture line. The equipment is expected to cost $382,800 and to have a six-year life and no salvage value. The equipment is expected to generate income of $15,639 and net cash flow of $77,848 in each year of its six-year life. Santana requires an 7\% return on all investments. (PV of \$1. EV of \$1. PVA of \$1, and EVA of \$1) (Use appropriate factor(5) from the tables provided.) (Negative net present values should be indicated with a minus sign. Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest whole number.) Required: 1.a. Compute the payback period for this equipment. 1.b. Compute the net present value for this equipment. 1-c. Compute internal rate of return for this equipment. 2. If Santana requires investments to have payback periods of four years or less, should she invest in this equipment? 3. If Santana requires investments to have ot least an 7% internal rate of return, should she invest in this equipment? Complete this question by entering your answers in the tabs below. Compute the net present value for this equipment. (Negative values must be entered as a negative number.) quired: . Compute the payback period for this equipment. Compute the net present value for this equipment. . Compute internal rate of return for this equipment. If Santana requires investments to have payback periods of four years or less, should she invest in this equipment? If Santana requires investments to have at least an 7% internal rate of return, should she invest in this equipment? Complete this question by entering your answers in the tabs below. Compute internal rate of retum for this equipment. ve factor to 4 decimals and final answers to the nearest whole number.) quired: 1. Compute the payback period for this equipment. . Compute the net present value for this equipment. .. Compute internal rate of return for this equipment. If Santana requires investments to have payback periods of four years or less, should she invest in this equipment? If Santana requires investments to have at least an 7% internal rate of return, should she invest in this equipment? Complete this question by entering your answers in the tabs below. 2. If Santana requires investments to have payback periods of four years or less, should she invest in this equipment? 3. If Santana requires investments to have at least an 7% internal rate of retum, should she invest in this equipment? 2. If Santana requires invertments to have payback periods of four years or less, should sho invest in this equipment? 3. If Santana requires investments to have at least an 7% internal rate of return, should she invest in this equpment? 6 return on al investments. (PV of \$1. EV of \$1. PVA of \$1, and FVA of \$1) (Use appropriate factor(S) from the tabies prour present efactor to 4 decimals and final answers to the neares uired: Compute the payback period for this equipment. Compute the net present value for this equipment. Compute internal rate of return for this equipment. isantana requires investments to have payback periods of four years or less, should she invest in this equipment? I Santana requires investments to have at least an 7% internal rate of return, should she invest in this equipment? Complete this question by entering your answers in the tabs below. 2. If Santane requires investments to have payback periods of four years or less, should she invest in this equipment? 3. If Santana requires itvestments to have at least an 7.4 internal rate of return, should she invest in this equiprnent? 2. If Sastana requires levestments to have payback periods of four years or less, should she invest in this equpenent? 2. H Sartans requires investments to have at least an 7% internal rase of retum, should she invest in this equipment Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started