Carbide Chemical Company is considering the replacement of two old machines with a new, more efficient...

  

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Carbide Chemical Company is considering the replacement of two old machines with a new, more efficient machine. It has determined that the relevant after-tax incremental operating cash flows of this replacement proposal are as follows: 2) END OF YEAR Cash flows -$204,424 S86,890 $106,474 $91,612 END OF YEAR 8. Cash flows $84,801 $84,801 What is the project's accounting rate of return, net present value, payback period and, profitability index? Assume that the required of return for this project is 14%. Is the project acceptable? Carbide Chemical Company is considering the replacement of two old machines with a new, more efficient machine. It has determined that the relevant after-tax incremental operating cash flows of this replacement proposal are as follows: 2) END OF YEAR Cash flows -$204,424 S86,890 $106,474 $91,612 END OF YEAR 8. Cash flows $84,801 $84,801 What is the project's accounting rate of return, net present value, payback period and, profitability index? Assume that the required of return for this project is 14%. Is the project acceptable?

Answer rating: 100% (QA)

1 Calculation of the Accounting Rate of Return Accounting Rate of Return Average Accounting Income I... View the full answer