Number 7:

(Click the icon to view the projected net cash inflows.) (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements. Requirement 1. Compute this project's NPV using Eon's 16% hurdle rate. Should Eon invest in the equipment? Eon Industries invest in the equipment. and inflows back to the present value.) The refurbishment provides a NPV. The refurbishment NPV is to overcome the original NPV of the equipment. Therefore, the refurbishment alter Eon Industries' original decision Data table Requirements 1. Compute this project's NPV using Eon's 16% hurdle rate. Should Eon invest in the equipment? 2. Eon could refurbish the equipment at the end of six years for $101,000. The refurbished equipment could be used one more year, providing $72,000 of net cash inflows in year 7 . Additionally, the refurbished equipment would have a $52,000 residual value at the end of year 7 . Should Eon invest in the equipment and refurbish it after six years? (Hint: In addition to your answer to Requirement 1 , discount the additional cash outflow and inflows back to the present value.) Reference Reference