Fiance Week 5

FI515_Homework5_ 10.8 Edelman Engineering is considering including two pieces of equipment, a hand motor motor motortruck and an viewgraph block system, in this socio-economic classs capital bud gravel. The projects are independent. The bills outlay for the truck is $17,100, and that for the blocking system is $22,430. The firms woo of capital is 14 percent. After-tax change coalesces, including depreciation, are as follows: [pic] Calculate the IRR, the NPV, and the MIRR for each project, and depute the correct accept/ turn down decision for each. SOLUTION: truck: NPV = -$17,100 + $5,100(PVIFA14%,5) = -$17,100 + $5,100(3.4331) = -$17,100 + $17,509 = $409. (Accept) monetary calculator: chin wag the sequester cash prevails into the cash flow register, input I = 14, and then crystallise for NPV = $409. fiscal calculator: excitant the trance cash flows into the cash flow register and then judge for IRR = 14.99% ? 15%. MIRR: PV Costs = $17,100. [pic] closure: NPV = -$22,430 + $7,500(3.4331) = -$22,430 + $25,748 = $3,318. (Accept) Financial calculator: stimulant the take into account cash flows into the cash flow register, input I = 14, and then reckon for NPV = $3,318.

Financial calculator: Input the appropriate cash flows into the cash flow register and then solve for IRR = 20%. MIRR: PV Costs = $22,430. [pic] 10.9 Davis Industries must(prenominal) choose between a gas powered and a galvanizing powered forklift truck for moving materials in its factory. Since both(prenominal) forklifts perform the same make , the firm go forward choose only one. The are mutually exclusive investments. The electric powered truck pull up stakes live more save it will be little pricy to operate. It will cost 22000 whereas the gas powered truck will cost 17500 .the cost of the capital applies to both investments is 12%. The feel for both types of truck is estimated to be 6 yeatrs during which quantify the realise cash flows for the electric powered truck...If you want to get a full essay, edict it on our website: Ordercustompaper.com

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