NPVlong dash—Mutually
exclusive projects Hook Industries is considering the replacement of one of its old metal stamping machines. Three alternative replacement machines are under consideration. The relevant cash flows associated with each are shown in the following table:
LOADING...
. The firm's cost of capital is
1414%.
a. Calculate the net present value
(NPV)
of each press.
b. Using NPV, evaluate the acceptability of each press.
c. Rank the presses from best to worst using NPV.
d. Calculate the profitability index (PI) for each press.
e. Rank the presses from best to worst using PI.
|
Machine A |
Machine B |
Machine C |
|
| Initial investment
(CF 0CF0) |
$84 comma 90084,900 |
$60 comma 30060,300 |
$130 comma 500130,500 |
|
Year (t) |
Cash inflows
(CF Subscript tCFt) |
||
|
1 |
$17 comma 80017,800 |
$12 comma 50012,500 |
$49 comma 60049,600 |
|
2 |
$17 comma 80017,800 |
$14 comma 40014,400 |
$29 comma 90029,900 |
|
3 |
$17 comma 80017,800 |
$16 comma 50016,500 |
$19 comma 90019,900 |
|
4 |
$17 comma 80017,800 |
$17 comma 90017,900 |
$19 comma 60019,600 |
|
5 |
$17 comma 80017,800 |
$20 comma 00020,000 |
$20 comma 00020,000 |
|
6 |
$17 comma 80017,800 |
$25 comma 50025,500 |
$30 comma 40030,400 |
|
7 |
$17 comma 80017,800 |
long dash— |
$40 comma 10040,100 |
|
8 |
$17 comma 80017,800 |
long dash— |
$50 comma 300 |
In: Finance
Develop your own visual/graphic showing how each applicant fared
Recommend 6-8 applicants to proceed to a panel interview phase
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They want to hire three full-time management analysts to work in three different locations: San Francisco, Philadelphia, and Miami. The analysts would scout out work in their designated regions and manage the contracting and oversight of contractual consultants.
Judith and Eric plan to keep ownership of the company, but want to step away from the day-to-day as soon as the business is working well enough without them.
The focus of this assignment is to assist Judith and Eric with the selection of three Management Analysts by coming up with a weighted formula of important selection factors.
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(Assuming the slope of all predictors are statistically significant at the alpha level of .05.)
PLEASE SPECIFY CORRECT ANSWER
| None provided. |
| 26.08 |
| 28.08 |
| 27.09 |
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