Year 1 2 3 4 5 PI Manufacturing is looking into buying two additional manufacturing lines....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Year 1 2 3 4 5 PI Manufacturing is looking into buying two additional manufacturing lines. Both projects are independent. The cash outlay for a manual line is $54,750, and that for the semi- automated production line is $125,500. The firm's cost of capital is 14%. After-tax cash flows are listed below, note that these include depreciation. Calculate the NPV, IRR and PI for each project and indicate the correct accept/reject decision for each assessment criteria. 6 Manual $15,850 14,750 13,000 15,890 14,750 13,000 Semi-Automated $30,200 33,750 30,000 29,575 31,780 32,000 Year 1 2 3 4 5 PI Manufacturing is looking into buying two additional manufacturing lines. Both projects are independent. The cash outlay for a manual line is $54,750, and that for the semi- automated production line is $125,500. The firm's cost of capital is 14%. After-tax cash flows are listed below, note that these include depreciation. Calculate the NPV, IRR and PI for each project and indicate the correct accept/reject decision for each assessment criteria. 6 Manual $15,850 14,750 13,000 15,890 14,750 13,000 Semi-Automated $30,200 33,750 30,000 29,575 31,780 32,000
Expert Answer:
Answer rating: 100% (QA)
1 Calculate the NPV IRR and PI of Manual line as follows Given initial outlay is 54750 Cash flow as ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these finance questions
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
-
. A vertical pole that is 2 meters tall casts a shadow that is 1.5 meters long. Nearby, at the same time, another vertical pole casts a shadow that is 6.5 meters long. How tall is this pole? a. Make...
-
If the focal length of a lens is 3 centimeters and the image distance is 5 centimeters from the lens, what is the distance from the object to the lens?
-
The following is a symbolic microprogram for an instruction in the computer defined in Sec. 7-3. a. Specify the operation performed when the instruction is executed. b. Convert the four...
-
A dist-shaped flywheel, of uniform density , other radius R, and thickness w, rotates with an angular velocity , in rad/s. (a) Show that the moment of inertia, I= vol r2 dV, can be expressed as I=...
-
The Yazoo Company, a client of your firm, has come to you with the following problem: It has three clerical employees who must perform these functions: 1 Maintain general ledger 2 Maintain accounts...
-
Information from Sheppard Picture Frames cash account as well as the November bank statement is presented next. Requirements 1. Prepare the bank reconciliation on November 30. 2. Prepare all...
-
Label each of the following accounts as an asset (A), liability (L), owners equity (OE), revenue (R), or expense (E). Indicate the financial statement on which the account belongsincome statement...
-
Question 5, P4-7 (similar to) Part 1 of 4 > HW Score: 25%, 3 of 12 points Points: 0 of 1 Save Present value of an ordinary annuity. Fill in the missing present values in the following table for an...
-
A bumper, consisting of a nest of three springs, is used to arrest the horizontal motion of a large mass which is traveling at 40 ft/sec as it contacts the bumper. The two outer springs cause a...
-
A doctor orders 1250 mL to be infused in 5 hours. The drop factor of the infusion set is calibrated to 15 gtt/mL. Use the formula to find the flow rate. Look at the scale below with numbered...
-
Babel Corporation acquired all outstanding shares of Connor Ltd. for $2.1 million. Selected information relating to Connor was as follows: Fair value of identifiable net assets: $ 2.0 million Book...
-
A monopolist has determined that marginal revenue is $2.00 and the average cost is $1.75. It has also determined that the lowest sustainable average cost is $1.75. To maximize profit, should the firm...
-
29. Charles company used the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected...
-
How will the intangible assets that Facebook acquired in the WhatsApp deal be accounted for in the financial statements going forward? Explain briefly
-
The spot price of oil is $60.80 per barrel and the cost of storing a barrel of oil for one year is $4.50, payable at the end of the year. The risk-free interest rate is 1.2% per annum, continuously...
-
Rick is a stock analyst who is evaluating ADS and ACXM. On July 12, 2010, the price of ADS before the open was $58.20 per share, and it closed at $56.07 per share. The price of ACXM before the open...
-
F.(3e* -2x 3 sin(2x)) is equal to 2 3 Cos 8. IT 3, t (4+@ 2 3, 1+o 1 4 Cos 4 4 1 3. 1 +4cos V7 (1+o 4 1 4 Cos 4 1+0 4-
-
Yolanda is a cash basis taxpayer with the following transactions during the year: Cash received from sales of products........................................................................$65,000...
-
Phil and Linda are 25-year-old newlyweds and file a joint tax return. Linda is covered by a retirement plan at work, but Phil is not. a. Assuming Phil's wages were $27,000 and Linda's wages were...
-
On February 2, 2012, Alexandra purchases a personal computer for her home. The computer cost $3,000. Alexandra uses the computer 80 percent of the time in her accounting business, 10 percent of the...
-
A shaft running at \(500 \mathrm{rpm}\) carries a pulley \(1 \mathrm{~m}\) diameter and drives another pulley by means of ropes with a speed ratio of 2:1. The drive transmits \(200 \mathrm{~kW}\)....
-
A flat belt drive is required to transmit \(20 \mathrm{~kW}\) at \(300 \mathrm{rpm}\) of \(2 \mathrm{~m}\) diameter pulley. The angle of contact is \(170^{\circ}\) and coefficient of friction between...
-
If the difference between tight and slack side tensions for a leather belt does not exceed \(100 \mathrm{~N} / \mathrm{cm}\) of width for a belt \(5 \mathrm{~mm}\) thick, find the maximum stress in...
Study smarter with the SolutionInn App