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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 5. What are the payback periods for production systems 1 and 2? If the systems are mutually exclusive and the firm always chooses projects with the lowest payback period, in which system should the firm invest?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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...
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?
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 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...
Sandhill Incorporated management is considering investing in two alternative production systems. The systems are mutually exclusive,...
Sandhill 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 10 percent
discount rate for production systems. Year System 1 System 2 0
-$12,590 -$48,783 1 12,731 33,490 2 12,731 33,490 3 12,731 33,490
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,...
Wildhorse 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 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,...
Wildhorse 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 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
1) Calculate NPV. (Enter negative
amounts using negative sign, e.g. -45.25. Do not round discount
factors. Round...
Crane Incorporated management is considering investing in two alternative production systems. The systems are mutually exclusive,...
Crane 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 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...
Net Present Value Method, Internal Rate of Return Method, and Analysis The management of Advanced Alternative...
Net Present Value Method, Internal Rate of Return Method, and
Analysis
The management of Advanced Alternative Power Inc. is considering
two capital investment projects. The estimated net cash flows from
each project are as follows:
Year Wind Turbines Biofuel Equipment
1 $250,000 $530,000
2 250,000 530,000
3 250,000 530,000
4 250,000 530,000
Present Value of an Annuity of $1 at Compound Interest
Year 6% 10% 12% 15% 20%
1 0.943 0.909 0.893 0.870 0.833
2 1.833 1.736 1.690 1.626 1.528...
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