Question 1 of 4 - 71 View Policies Current Attempt in Progress Caine Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $182,481 and has an estimated useful life of 8 years with zero salvage value. Management estimates that the new bottling machine will provide net annual cash flows of $33,200. Management also believes that the new bottling machine will save the company money because it is expected to be more reliable than other machines, and thus will reduce downtime. Assume a discount rate of 11%. Click here to view PV table. Calculate the net present value. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round present value answer to 0 decimal places, e.g. 125.) Net present value $ How much would the reduction in downtime have to be worth in order for the project to be acceptable? (Round answer to 0 decimal places, e.g. 125.) $ e Textbook and Media Question 2 of 4 -/1 III View Policies Current Attempt in Progress Ranger Corporation has decided to invest in renewable energy sources to meet part of its energy needs for production. It is considering solar power versus wind power. After considering cost savings as well as incremental revenues from selling excess electricity into the power grid, it has determined the following. Click here to view PV table. Present value of annual cash flows Initial investment Solar $52,380 $39,900 Wind $132,500 $104,000 Determine the net present value and profitability index of each project. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round present value answers to 0 decimal places, e.g. 125 and profitability index answers to 2 decimal places, e.g. 15. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Solar Wind Net present value $ Profitability index Which energy source should it choose? The company should choose energy source. e Textbook and Media Question 3 of 4 > - 71 III View Policies Current Attempt in Progress Wayne Company is considering a long-term investment project called ZIP.ZIP will require an investment of $117,920. It will have a useful life of 4 years and no salvage value. Annual revenues would increase by $79,100, and annual expenses (excluding depreciation) would increase by $40,100. Wayne uses the straight-line method to compute depreciation expense. The company's required rate of return is 13%. Compute the annual rate of return. (Round answer to 0 decimal places, e.g. 15%.) Annual rate of return % Determine whether the project is acceptable? the project. e Textbook and Media Save for Later Attempts: 0 of 3 used Submit Answer Question 4 of 4
