Question: help please read all parts Answer the following questions using the information below: Gavin inc, is in need of a computer network for their staff.






Answer the following questions using the information below: Gavin inc, is in need of a computer network for their staff. They recelve a proposal as below : Proposal Initial after-tax investment in equipment \$102,000 Annual cash increase in operations: The company uses straight-line depreciation for all capital assets. Required rate of retum= 14%: tax rate =30%. What are Annual Cash Flows from Operations? What is the Net Present Value (NPV)? How long is the Payback Period? To compute Internal Rate of Return (IRR), please answer the below questions one by one: a. What is the computed Present Value Annuity Discount Factor (rounded to 3 decimal places)? b. What are the two neighboring Present Value Annuity Discount Factors from Appendix? c. What are the two discount rates corresponding to your answers in part b? d. Please write down the formula to calcute IRR as well as your final answer. What is the computed Accrual Accounting Rate of Return (AARR)? For the toolbar, press ALT+F10(PC) or ALT+FN+F10 (Mac). Combining your answers to NPV and IRR methods, should the management accept or reject the proposal? Why? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). How would your answers to the above answers change if the terminal disposal value (before tax) of the proposal is $1,000 instead of 0 ? a. Will the answer to NPV increase, decrease, or remain the same? b. Wil the answer to Payback Period increase, decrease, or remain the same? c. Wil the answer to IRR increase, decrease, or remain the same? d. Will the answer to AARR increase, decrease, or remain the same
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