1 2 B C D A Schultz Inc. is deciding to automate either its Molding department or its Finishing department. Funds are only available for one automation. You must decide which department will be automated. The original cost, net cash inflows, and hurdle rates are shown below for each project. Calculate the payback period, internal rate of return, and net present value for each project. The IRR is an interest rate. Your answer should be presented with two decimal places in this format x.xx%. Then decide which department you would choose to automate based on this information. Explain your answer in the explanation box for the department you would automate. Calculations and explanations can be given on this worksheet. Formulas must be used in the answer boxes for the payback period, IRR, and NPV to receive credit. Excel formulas are perfectly acceptable. 3 Hurdle Rate: 4 Original Cost: $ 5 Net Cash Inflows: 6 Year 1 $ 7 Year 2 8 Year 3 9 Year 4 10 Year 5 11 Year 6 12 Payback period: 13 14 21567 15 Internal Rate of Return: 17 Net Present Value: 2.94 years Ready Problem (+ Molding 7% (925,000) 372,000 340,000 227,000 209,000 199,000 159,000 19.30% H G H K M Average: -462499.965 Count: 7 Sum: -924999.93 10:03 AM 2/13/2022 100% B 17 Net Present Value: 18 19 20 21 Explanation textbox: 22 23 24 25 Hurdle Rate: 26 Original Cost: $ 27 Net Cash Inflows: 28 Year 1 $ 29 Year 2 30 Year 3 31 Year 4 32 Year 5 33 Year 6 34 Year 7 35 Year 8 36 Payback period: Ready Problem + C Would you choose to automate the Molding department? Why? Finishing 7% (1,900,000) 365,000 475,000 375,000 275,000 329,000 429,000 329,000 279,000 N D G H K M + 100% Average: -462499.965 Count: 7 Sum: -924999.93 B 10:03 AM 2/13/2022 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 A B C D E G H J K L M 475,000 375,000 275,000 329,000 429,000 329,000 Payback period: Internal Rate of Return: Net Present Value: Explanation textbox: Problem + y 279,000 Would you choose to automate the Finishing department? Why? H a H Average: -462499.965 Count: 7 Sum: -924999.93 + 10:03 AM 2/13/2022 100%