You are a Financial Analyst for KYC Company. Management is considering five different projects to help increase employee productivity at the workplace. Management wants you to evaluate the below projects. Note: Given our class time constraints, this assignment has been simplified by removing depreciation, net operating capital, and tax rates. The only cash flow you would have in the terminal cash flow is if there is a salvage value, and we assume that the salvage value and the book value match so calculating tax benefit or liability is not necessary.

Purchase Tech accessories for 300 employees. The approximate cost of each accessory is $1,000 and will be given to each employee. Your company estimates cash flows of 82,000 for year 1 by using these accessories for product development. The cash flows will increase 2.9% for the next four years. We anticipate these accessories being used for five years with a total of $22,500 as a salvage value.

Answer rating: 100% (QA)

Calculation of IRR Year Cash Flows PVIF 15023 PV 0 300000 1000 300000 1 ... View the full answer