Determine the internal rate of return for a project that costs -$149,500 and would yield after-tax cash flows of $23,000 the first year, $25,000 the second year, $28,000 the third year, $30,000 the fourth year, $34,000 the fifth year, and $40,000 the sixth year.

Question 28 options:

Quality Improvement and Profitability Objective Gagnon Company reported the following sales and quality costs for the past four years.

Assume that all quality costs are variable and that all changes in the quality cost ratios are due to a quality improvement program.

Year Sales Revenues Quality Costs as a Percent of Revenues (I only need the answer to the third required part in bold please)

Year 1 $9,600,000 30%

Year 2 10,400,000 27%

Year 3 12,320,000 23%

Year 4 15,320,000 19%

Required: 1. Compute the quality costs for all four years. Quality Cost Year

Year 1 $ 2,880,000

Year 2 $ 2,808,000

Year 3 $ 2,833,600

Year 4 $ 2,910,800 (These answers are correct.)

By how much did net income increase from Year 1 to Year 2 because of quality improvements? $ 312,000 (correct)

By how much did net income increase from Year 2 to Year 3 because of quality improvements? $ 492,800 (correct)

By how much did net income increase from Year 3 to Year 4 because of quality improvements? $ 612,800 (correct)

Required 2. The management of Gagnon Company believes it is possible to reduce quality costs to 3 percent of sales. Assuming sales will continue at the Year 4 level, calculate the additional profit potential facing Gagnon. $ 2,451,200 (correct)

Is the expectation of improving quality and reducing costs to 3 percent of sales realistic? Yes (correct)

Required 3. Assume that Gagnon produces one type of product, which is sold on a bid basis. In Years 1 and 2, the average bid was $200. In Year 1, total variable costs were $120.00 per unit. In Year 3, competition forced the bid to drop to $160.00. Do not round the intermediate calculations and round your final answers to the nearest dollar.

Compute the total contribution margin in Year 3 assuming the same quality costs as in Year 1. $

Now, compute the total contribution margin in Year 3 using the actual quality costs for Year 3. $

What is the increase in profitability resulting from the quality improvements made from Year 1 to Year 3? $

I need the third part in bold more than anything. Thank you for your time.

Different cash flow.  Given the following cash inflow at the end of each​ year, what is the future value of this cash flow at 6%​, 11%​, and 18​% interest rates at the end of year​ 7?

Different cash flow. Given the following cash inflow at the end of each year, what is the future value of this cash flow at 7%, 12%, and 14% interest rates at the end of year 7?

Find the inflation rate based in the information presented in the table below. For you calculations assume a fix consumption basket consisting of 3 footballs and 4 basketballs, and year 1 as the base year.

A firm is considering a project that requires an initial investment of $420,000. The life of this project is five years. Cash flows for each year are estimated as follows: Year 1 Year 2 Year 3 Year 4 Year 5 $180,000 $220,000 $160,000 -$20,000 -$80,000 If the cost of capital of this project is 8%, what is the payback period of this project?

A firm is considering a project that requires an initial investment of $250,000. The life of this project is five years. Cash flows for each year are estimated as follows:

The cost of capital of this project is 8%. Calculate the profitability index and make a decision.

Kermit Kite Co. has 2 Projects under consideration- PROJECT C and PROJECT D with the following cashflows.

PROJECT C PROJECT D

Year 0 (800,000) Year 0 (360,000)

Year 1 450,000    Year 1 200,000

Year 2 350,000    Year 2 265,000

Year 3 215,000

The firm's cost of capital is 12%.

Calculate the EAA for each project. Which is the preferred project under EAA and why?

Different cash flow.  Given the following cash inflow at the end of each​ year, what is the future value of this cash flow at 3 %​, 8 %​, and 16​% interest rates at the end of year​ 7? Year​ 1: ​$12,000 Year​ 2: ​$21,000 Year​ 3: ​$31,000 Years 4 through​ 6: ​$0 Year​ 7: ​$150,000 What is the future value of this cash flow at 3​%, 8% and 16% interest rate at the end of year​ 7?

An Australian multinational company is planning a project in the UK. The costs and expected cash flows for the project are as follows:

         Project 1:

         Exchange rate:

            The company uses a discount rate of 10% for all projects. Is the project acceptable for cash flows assessed in Australian Dollar (A$)? Also, determine payback period of the project for cash flows converted to Australian Dollar (A$).