$$

$$ ALT

$360$

AWA

$2.(20$ pts$)$ Mando is considering two different packI am considering an investment $($cash outflow$)$ at time $0$ of $$11,000.$ The project life is $4$ years. At year one, the project net benefits $($cash inflows$)$ are $$4,000,$ at year two they are $$0,$ at year three they are $$6,000$ and at year four they are $$6,000.$

a$.(5$ points$)$ Are the cash flows simple or non$-$simple? Why?

ion raind

$$

$(969$

$\backslash$table$[[$Simple or Non$-$Simple?,Simple$],[$Reason$,$The carn fiow stayed positive$],[,$the whole time$]]$

Q Qunel?

b$.(10$ points$)$ Make at least two iterations of the "trial and error" method of internal rate of return $($IRR$)$ to find an interval for IRR. Hint: IRR$>10\%.($The range of the interval cannot be greater than $3\%,$ eg$.20\%20,699\mathrm{.}1q,$

$s$ rci

$$

$$ ALT

$360$

AWA

$2.(20$ pts$)$ Mando is considering two different packI am considering an investment $($cash outflow$)$ at time $0$ of $$11,000.$ The project life is $4$ years. At year one, the project net benefits $($cash inflows$)$ are $$4,000,$ at year two they are $$0,$ at year three they are $$6,000$ and at year four they are $$6,000.$

a$.(5$ points$)$ Are the cash flows simple or non$-$simple? Why?

ion raind

$$

$(969$

$\backslash$table$[[$Simple or Non$-$Simple?,Simple$],[$Reason$,$The carn fiow stayed positive$],[,$the whole time$]]$

Q Qunel?

b$.(10$ points$)$ Make at least two iterations of the "trial and error" method of internal rate of return $($IRR$)$ to find an interval for IRR. Hint: IRR$>10\%.($The range of the interval cannot be greater than $3\%,$ eg$.20\%20,699\mathrm{.}1q,$

$s$ rci

You should show your mathematical work to get credit. Please, round to two decimal places for the numerical answers.

Put final answers in the boxes provided.

If Domino's pizza has the following two mutually exclusive investment opportunities.

$\backslash$table$[[$Year$,$Net Cash Flow$],[$Project $1,$Project $2],[x10,$$$,-14,000,$y$.$ $$,-7,000],[21,$$$,9,000,y_2$$$,5,000],[2,$$$,8,000,$$$,7,000],[3,$$$,10,000,$$$,7,000]]$

a$.(15$ pts$)$ Which one should Domino's choose if MARR $=12\%?$

b$.(10$ pts$)$ Compute the discounted payback period of project $2.($Round to two decimal places$)$

$(20$ pts$)$ Mando is considering two different packaging machines for its plant in Opelika. The relevant information about the two machines is listed below $($note that the annual cost and the annual benefit occur identically at the end of each year$).$ Mando uses a MARR of $15\%.$ Which machine do you recommend to Mando? Explain why?

First Cost

Annual Maintenance Cost

Annual Benefit

Salvage Value

Life $($years$)$

AW

$\backslash$table$[[$Machine A$,$Machine B$],[$$$8,500,$$$8,000$