Question: PI Manufacturing is looking into buying two additional manufacturing lines. Both projects are independent. The cash outlay for a manual line is $54,750, and that

  1. PI Manufacturing is looking into buying two additional manufacturing lines. Both projects are independent. The cash outlay for a manual line is $54,750, and that for the semi-automated production line is $125,500. The firm's cost of capital is 14%. After-tax cash flows are listed below, note that these include depreciation. Calculate the NPV, IRR and PI for each project and indicate the correct accept/reject decision for each assessment criteria.

Year

Manual

Semi-Automated

1

$15,850

$30,200

2

14,750

33,750

3

13,000

30,000

4

15,890

29,575

5

14,750

31,780

6

13,000

32,000

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