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Net present Value: Blanda Incorporated mangement is considering investing in two alternative production systems. The systems...
Net present Value: Blanda Incorporated mangement is considering investing in two alternative production systems. The systems are mutually exclusive, and the cost of the new equipment and the resulting cash flows are shown in the accompanying table. If the firm uses a 9 percent discount rate for their production systems, in which system should the firm invest?
Cash Flows Year System 1 System 2
0 ($15,000) ( $45,000)
1 $15,000 $32,000
2 $15,000 $32,000
3 $15,000 $32,000
Compute the IRR for both production system 1 and production system 2. Which hasa the higher IRR? Which production system has the higher NPV? Explain why the IRR and NPV rankings of systems 1 and 2 are different.
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[EXCEL] Net present value: Blanda Incorporated management is considering investing in two alternative production systems. The...
[EXCEL] Net present value: Blanda Incorporated management is
considering investing in two alternative production systems. The
systems are mutually exclusive, and the cost of the new equipment
and the resulting cash flows are shown in the accompanying table.
If the firm uses a 9 percent discount rate for production system
projects, in which system should the firm invest?
Year System
1 System 2
0
−$15,000 −$45,000
1
15,000
32,000
2
15,000
32,000
3
15,000
32,000
[EXCEL] Payback: Refer to Problem...
Cullumber Incorporated management is considering investing in two alternative production systems.
Cullumber Incorporated management is considering investing in
two alternative production systems. The systems are mutually
exclusive, and the cost of the new equipment and the resulting cash
flows are shown in the accompanying table. The firm uses a 9
percent discount rate for production system projects.YearSystem
1System
20-$13,000-$42,600113,00033,900213,00033,900313,00033,900Calculate NPV. (Enter negative amounts using negative
sign, e.g. -45.25. Do not round discount factors. Round answers to
2 decimal places, e.g. 15.25.)In which system should the firm invest?
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Blossom Incorporated management is considering investing in two
alternative production systems. The systems are mutually exclusive,
and the cost of the new equipment and the resulting cash flows are
shown in the accompanying table. The firm uses a 9 percent discount
rate for production system projects.
Year
System
1
System
2
0
-$15,900
-$43,400
1
15,900
31,700
2
15,900
31,700
3
15,900
31,700
Calculate NPV. (Enter negative amounts using negative
sign, e.g. -45.25. Do not round discount factors. Round answers...
Blossom Incorporated management is considering investing in two alternative production systems. The systems are mutually exclusive,...
Blossom Incorporated management is considering investing in two
alternative production systems. The systems are mutually exclusive,
and the cost of the new equipment and the resulting cash flows are
shown in the accompanying table. The firm uses a 7 percent discount
rate for production system projects. Year System 1 System 2 0
-$12,000 -$42,000 1 12,000 30,000 2 12,000 30,000 3 12,000 30,000
Calculate NPV. (Enter negative amounts using negative sign, e.g.
-45.25. Do not round discount factors. Round answers...
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alternative production systems. The systems are mutually exclusive,
and the cost of the new equipment and the resulting cash flows are
shown in the accompanying table. The firm uses a 10 percent
discount rate for production systems. Year System 1 System 2 0
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Compute the IRR for both production system 1 and production system
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two alternative production systems. The systems are mutually
exclusive, and the cost of the new equipment and the resulting cash
flows are shown in the accompanying table. The firm uses a 7
percent discount rate for production systems.
Year System 1 System 2
0 -$15,080 -$47,448
1 15,294 33,300
2 15,294 33,300
3 15,294 33,300
Compute the IRR for both production system 1 and production
system 2. (Do not round intermediate calculations. Round...
Wildhorse Incorporated management is considering investing in two alternative production systems. The systems are mutually exclusive,...
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two alternative production systems. The systems are mutually
exclusive, and the cost of the new equipment and the resulting cash
flows are shown in the accompanying table. The firm uses a 10
percent discount rate for production system projects.
Year System 1 System 2
0 -$14,200 -$44,000
1 14,200 34,400
2 14,200 34,400
3 14,200 34,400
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amounts using negative sign, e.g. -45.25. Do not round discount
factors. Round...
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alternative production systems. The systems are mutually exclusive,
and the cost of the new equipment and the resulting cash flows are
shown in the accompanying table. The firm uses a 8 percent discount
rate for production system projects.
YearSystem 1System
2
0
-$12,900-$43,800
1
12,900 32,500
2
12,900 32,500
3
12,900 32,500
Problem 10.25 Carla Vista Incorporated management is considering investing in two alternative production systems. The systems...
Problem 10.25
Carla Vista Incorporated management is considering investing in
two alternative production systems. The systems are mutually
exclusive, and the cost of the new equipment and the resulting cash
flows are shown in the accompanying table. The firm uses a 9
percent discount rate for production systems.
Year
System 1
System 2
0
-$12,010
-$49,910
1
12,080
33,930
2
12,080
33,930
3
12,080
33,930
Compute the IRR for both production system 1 and production system
2. (Do not round...
Solve problem Net present value analysis Emery communications company is considering the production and marketing of...
Solve problem
Net present value analysis
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