Question: Please do help me out on this question and please do show work? Thanks so much Sensitivity analysis: Boulder Creek Industries Boulder Creek Industries is

Please do help me out on this question and please do showwork? Thanks so much Sensitivity analysis: Boulder Creek Industries Boulder Creek IndustriesPlease do help me out on this question and please do show work? Thanks so much

Sensitivity analysis: Boulder Creek Industries Boulder Creek Industries is considering an investment in equipment based on the following estimates: Cost of equipment $3,000,000 Residual value 200,000 10 years Useful life a. Determine the net present value of the equipment, assuming a desired rate of return of 12% and annual net cash flows of $800,000. Use the present value tables appearing in Exhibit 2 and 5 of this chapter. Net present value $ b. Determine the net present value of the equipment, assuming a desired rate of return of 12% and annual net cash flows of $400,000, $600,000, and $800,000. Use the present value tables (Exhibit 2 and 5) provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value. Annual Net Cash Flow $400,000 $600,000 $800,000 Net present value c. Determine the net present value of the equipment, assuming a desired rate of return of 15% and annual net cash flows of $400,000, $600,000, and $800,000. Use the present value tables (Exhibit 2 and 5) provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value. Annual Net Cash Flow $400,000 $600,000 $800,000 Net present value d. Determine the minimum annual net cash flow necessary to generate a positive net present value, assuming a desired rate of return of 12%. Round to the nearest dollar. Annual Net Cash Flow $ e. Boulder Creek industries wish to invest in an equipment and the projections for the same is as follows: Net cash inflow $400,000 $600,000 $800,000 Net present value ($675,600) $454,400 $1,584,400 Based on the above information, when Boulder Creek industries accepts the project? (a) If the net cash flow is $600,000 (b) If the net cash flow is $$800,000 (c) If the net cash flow is $400,000 (d) Both $600,000 and $800,000 net cash flow. d v Boulder creek industries wish to make a new investment in the equipment. Identify the statement that related to the investment decision. (a) The net present value should be positive for the investment. (b) Rate of return and its relationship to the net present value. (c) Net cash inflows out of the investment. (d) All the above. Sensitivity analysis: Boulder Creek Industries Boulder Creek Industries is considering an investment in equipment based on the following estimates: Cost of equipment $3,000,000 Residual value 200,000 10 years Useful life a. Determine the net present value of the equipment, assuming a desired rate of return of 12% and annual net cash flows of $800,000. Use the present value tables appearing in Exhibit 2 and 5 of this chapter. Net present value $ b. Determine the net present value of the equipment, assuming a desired rate of return of 12% and annual net cash flows of $400,000, $600,000, and $800,000. Use the present value tables (Exhibit 2 and 5) provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value. Annual Net Cash Flow $400,000 $600,000 $800,000 Net present value c. Determine the net present value of the equipment, assuming a desired rate of return of 15% and annual net cash flows of $400,000, $600,000, and $800,000. Use the present value tables (Exhibit 2 and 5) provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value. Annual Net Cash Flow $400,000 $600,000 $800,000 Net present value d. Determine the minimum annual net cash flow necessary to generate a positive net present value, assuming a desired rate of return of 12%. Round to the nearest dollar. Annual Net Cash Flow $ e. Boulder Creek industries wish to invest in an equipment and the projections for the same is as follows: Net cash inflow $400,000 $600,000 $800,000 Net present value ($675,600) $454,400 $1,584,400 Based on the above information, when Boulder Creek industries accepts the project? (a) If the net cash flow is $600,000 (b) If the net cash flow is $$800,000 (c) If the net cash flow is $400,000 (d) Both $600,000 and $800,000 net cash flow. d v Boulder creek industries wish to make a new investment in the equipment. Identify the statement that related to the investment decision. (a) The net present value should be positive for the investment. (b) Rate of return and its relationship to the net present value. (c) Net cash inflows out of the investment. (d) All the above

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