In the process of researching new equipment, Sheffield settled on two seemingly viable alternatives: 1. 2...

 

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In the process of researching new equipment, Sheffield settled on two seemingly viable alternatives: 1. 2 A one-time investment today of $38,000, which should generate net after-tax cash inflows of $19.000 per year for the next 3 years. Both amounts already include the depreciation tax shield. Sheffield's minimum required return is 9%. (a1) Calculate the NPV and IRR for both of these investments. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final NPV answers to 0 decimal places e.g. 58,971. Round IRR to 2 decimal places, e.g. 15.25%. Enter negative amounts using either a negative sign preceding the number, e.g. -58,971 or parentheses, e.g. (58,971).) NPV A one-time investment today of $48,000, which should generate net after-tax cash flows of $32,000 per year for the next 3 years. Click here to view the factor table IRR Option 1 % $ (a2) Which investment appears to be the better option? Option 2 % In the process of researching new equipment, Sheffield settled on two seemingly viable alternatives: 1. 2 A one-time investment today of $38,000, which should generate net after-tax cash inflows of $19.000 per year for the next 3 years. Both amounts already include the depreciation tax shield. Sheffield's minimum required return is 9%. (a1) Calculate the NPV and IRR for both of these investments. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final NPV answers to 0 decimal places e.g. 58,971. Round IRR to 2 decimal places, e.g. 15.25%. Enter negative amounts using either a negative sign preceding the number, e.g. -58,971 or parentheses, e.g. (58,971).) NPV A one-time investment today of $48,000, which should generate net after-tax cash flows of $32,000 per year for the next 3 years. Click here to view the factor table IRR Option 1 % $ (a2) Which investment appears to be the better option? Option 2 %