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Thank you so much! Briar Corporation is considering the purchase of a new plece of equipment. The cost savings from the equipment would result in
Thank you so much!
Briar Corporation is considering the purchase of a new plece of equipment. The cost savings from the equipment would result in an annual increase in net cash flow of $219,000. The equipment will have an initial cost of $1,219,000 and an 8 -year useful life. The salvage value of the equipment is estimated to be $219,000. Briar's cost of capital is 8%. (Future Value of $1, Present Value of $1, Future Value Annulty of $1, Present Value Annuity of $11 Note: Use appropriate factor from the PV tables. Required: a. What is the accounting rate of return? b. What is the payback period? c. What is the net present value? d. What would the net present value be with a 13% cost of capital? e. Bosed on the NPV calculations, what would be the equipment's internal rate of return? Complete this question by entering your answers in the tabs below. What is the accounting rate of return? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Complete this question by entering your answers In the tabs below. What is the payback perlod? Note: Round your answer to the nearest whole number. Complete this question by entering your answers in the tabs below. What is the net present value? Note: Negative amounts should be indicated by a minus sign. Round your answer to nearest dollar amount: Complete this question by entering your answers in the tabs below. What would the net present value be with a 13% cost of capital? Note: Negative value should be indicated by a minus sign. Round your answer to nearest doliar amount. Complete this question by entering your answers in the tabs below. Based on the NPV calculations, what would be the equipment's internal rate of return? Note: Round your answer to 2 decimal ploces Step by Step Solution
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