IWX Corporation is considering two possible investments and needs your help in determining which will be the
Fantastic news! We've Found the answer you've been seeking!
Question:
IWX Corporation is considering two possible investments and needs your help in determining which will be the better financial option. Perform the necessary calculations using Microsoft Excel so that maximum precision can be obtained. Unless indicated otherwise, enter your answers rounded to the nearest whole dollarinput code:
Investment Option "North"
This potential investment is a little more risky and longer term, so it has a minimum rate of return of This investment would require an initial outlay of cash to purchase a piece of equipment for $ and at the end of the year life of this investment is expected to have a salvage value of $ For each year of this investment, net annual cash inflows are expected to be $
How much is the present value of the purchase of equipment? $
How much is the present value of the salvage value? $
How much is the present value of the annual cash inflows? $
How much is the Net Present Value? $
What is the value of the Present Value Index? round to the nearest thousandths placeinput code:
Investment Option "South"
This potential investment is less risky and shorter term, so it has a minimum rate of return of This investment would require an initial outlay of cash of $ and at the end of the year life of this investment IWX Corporation is expected to have to pay a winddown cost of $ For the first years of this investment, net annual cash inflows are expected to be $ and for the last year of the investment, the net annual cash inflow is expected to be $
How much is the present value of the purchase of equipment? $
How much is the present value of the winddown cost? $
How much is the present value of the annual cash inflows for the first years? $
How much is the present value of the annual cash inflow for the final year of this investment? $
How much is the Net Present Value? $
What is the Internal Rate of Return? round to the nearest hundredths placeinput code:
Related Book For
Accounting Principles
ISBN: 9781118566671
11th Edition
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso
Posted Date: