Your storage rm has been offered $95.9DD in one year to store some goods for one year. Assume your costs are $963013, payable immediately. and the east of capital is 3.9%. Should you take the contrast? E The NPV will be $D. (Round to the nearest oent.) Data table (Click on the following icon I: in order to copy its contents into a spreadsheet.) Model Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Old Reliable - 5199 - $3.3 - $3.8 - $3.8 - $3.3 - $3.8 - $3.8 - $3.3 Short and Sweet - $98 - $2.1 - $2.1 - $2.1 - $2.1 X Data table (Click on the following icon [ in order to copy its contents into a spreadsheet.) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 - $39,200 - $2,000 - $2,000 - $2,000 - $2,000 - $2,000 Print DoneI Gateway Tours is choosing between two bus models. One is more expensive to purchase and maintain but lasts much longer than the other. Gateway's discount rate is 11.5%. The company plans to continue with one of the two models for the foreseeable future. Based on the costs of each shown here: g . which should it choose? (Note: dollar amounts are in thousands.) (I) Based on the costs of each model. which should it choose? (Select the best choice below.) Ci A. Gateway Tours should choose Old Reliable because it lasts longer. Cl B. Gateway Tours should choose Old Reliable because the equivalent annual annuity of its costs is smaller. Cl C. Gateway Tours should choose Short and Sweet because the NPV of its costs is smaller. C: o. Gateway Tours should choose Short and Sweet because the equivalent annual annuity of its costs is smaller. Orchid Biotech Company is evaluating several different development projects for experimental drugs. Although the cash flows are difficult to forecast, the company has come up with the following estimates of the initial capital requirements and /PVs for the projects: [ . Given a wide variety of staffing needs, the company has also estimated the number of research scientists required for each development project (all cost values are given in millions of dollars). a. Suppose that Orchid has a total capital budget of $60 million. How should it prioritize these projects? b. Suppose that Orchid currently has 12 research scientists and does not anticipate being able to hire more in the near future. How should Orchid prioritize these projects? a. Suppose that Orchid has a total capital budget of $60 million. How should it prioritize these projects? The profitability index for Project I is (Round to two decimal places.)- X Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Project Year 0 Year 1 Year 2 Year 3 Year 4 A - $50 $27 $20 $21 $12 B - $99 $18 $42 $52 $59 Print DoneYou are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $4,300 and will he posted fer one year. You expect that it will generate additional revenue of $T20 a month. What is the payback period? (Z? The payback period is D months. (Round to one decimal place.) Question 7, P 8-28 (similar to) HW Score: 0%, 0 of 10 points Part 1 of 5 O Points: 0 of 1 Save You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): a. What are the IRRs of the two projects? b. If your discount rate is 5.5%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently? a. What are the IRRs of the two projects? The IRR for project A is |%. (Round to one decimal place.)You need a particular piece of equipment for your production process. An equipment-leasing company has offered to lease the equipment to you for $10,EDU per year if you sign a guaranteed 5-year lease (the lease is paid at the end of each year}. The company would also maintain the equipment for you as part of the lease. Alternatively. you could buy and maintain the equipment yourself. The cash flows from doing so are listed here: @ {the equipment has an economic Ilfe of 5 years). If your discount rate ls 6.5%. what should you do\"?I (I) The net present value of the leasing alternative is 5D. [Round to the nearest dollar.) You are considering making a movie. The movie is expected to cost $10.4 million up front and take a year to produce. After that. it is expected to make $4.? million in the year it is released and $1 .i' million for the following four years. What is the payback period of this investment? If you require a payback period of two years. will you make the movie? Does the movie have positive NPV if the cost of capital is 10.5%? E) |l'tr'hat is the payback period of this Investment? The payback period is D years. [Round to one decimal place.) Your factory has been offered a contract to produce a part for a new printer. The contract would last for 3 years and your cash flows from the contract would be $5.01 million per year. Your upfront setup costs to be ready to produce the part would be $7.84 million. Your discount rate for this contract is 7.9%. a. What does the NPV rule say you should do? b. If you take the contract, what will be the change in the value of your firm? a. What does the NPV rule say you should do? The NPV of the project is $ million. (Round to two decimal places.)You have an opportunity to invest $49300 new in return for $50300 in one year. If your cost of capital is 15031 what 6 ie the NPV of this investment? The NPV will be 3D. (Round to the nearest cent.) Marian Plunket owns her own business and is considering an investment. If she undertakes the investment. it will pay $4,560 at the end of each of the next 3 years. The opportunity requires an initial investment of $1 .140 plus an additional investment at the end of the second year of $5,?DCI. What is the NPV of this opportunity if the interest rate is 2.5% per year\"? Should Marian take it? (E) What is the NPV of this opportunity it the interest rate ls 2.5% per year? The NPvr of this opportunity is 5D. (Round to the nearest cent.) - X Data table (Click on the following icon [ in order to copy its contents into a spreadsheet.) Initial Project Number Number of Research Capital ($) Scientists NPV ($) - 10 10.1 15 19.0 WAWN 15 22.0 IV 20 25.0 30 12 60.2 Print Done