? TWB Corporation is considering two possible investments and needs your help in determining which will be

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TWB 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 dollar/input code: 0). Investment Option "North" This potential investment is a little more risky and longer term, so it has a minimum rate of return of 13.20%. This investment would require an initial outlay of cash to purchase a piece of equipment for $144,500, and at the end of the 7-year life of this investment is expected to have a salvage value of $57,800. For each year of this investment, net annual cash inflows are expected to be $26,250. 1. How much is the present value of the purchase of equipment? 2. How much is the present value of the salvage value? 3. How much is the present value of the annual cash inflows? 4. How much is the Net Present Value? 24 5. What is the value of the Present Value Index? (round to the nearest thousandths place/input code: 0.000) Investment Option "South" %24 %24 %24 TWB 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 dollar/input code: 0). Investment Option "North" This potential investment is a little more risky and longer term, so it has a minimum rate of return of 13.20%. This investment would require an initial outlay of cash to purchase a piece of equipment for $144,500, and at the end of the 7-year life of this investment is expected to have a salvage value of $57,800. For each year of this investment, net annual cash inflows are expected to be $26,250. 1. How much is the present value of the purchase of equipment? 2. How much is the present value of the salvage value? 3. How much is the present value of the annual cash inflows? 4. How much is the Net Present Value? 24 5. What is the value of the Present Value Index? (round to the nearest thousandths place/input code: 0.000) Investment Option "South" %24 %24 %24

Answer rating: 100% (QA)

Calculation of Cash flow for year 7 Net cash inflow for year 7 salvage value Calculation of Cash flow for year 7 26250 57800 Calculation of Cash flow ... View the full answer