Calculate npv and irr for each machine

Reference no: EM13278938

The MIT Whitehead Institute must choose between two cDNA microarray machines to expand their high-throughput genomic laboratory. Both of these machines have the same function, and the firm will only choose on vendor from which to purchase their machines. The first machine, manufactured by Amersham Pharmacia (machine 1), will cost $250,000. The second machine, manufactured by PE Applied Biosystems (machine 2), will cost $200,000. The cost of capital for both of these investments is 10%. The life for both machines is estimated to be 5 years. During this period, cash flows for machine 1 will be $80,000 per year and cash flows for machine 2 will be $65,000 per year. These cash flows include depreciation expenses. Calculate NPV and IRR for each machine and select the best choice for the MIT Whitehead Institute.

Reference no: EM13278938

Questions Cloud

What is the expected capital gains yield : What is the dividend yield? (Round your answer to 2 decimal places. What is the expected capital gains yield?

Evaluate the solubility of ammonia gas in water : Calculate the solubility (in M units) of ammonia gas in water at 298 K and a partial pressure of 7.50bar . The Henry's law constant for ammonia gas at 298 K is 58.0 M atm and 1 bar = 0.9869 atm.

Calculate the equivalent resistance-reactance and impedance : The following tests are performed on a single phase transformer rated 30/6.3 KV , 10 MVA , 50 HZ i- Short circuit test with L.V side short circuited and measurement made on H.V side I = I full load , V = 2700 V , P 80 KW

What is the firm optimal capital budget : The firm's corporate cost of capital is 14 percent. project cost irr a $20000 17% b $15000 16% c $12000 15% d $18000 13% a. What is the firm's optimal capital budget?

Calculate npv and irr for each machine : These cash flows include depreciation expenses. Calculate NPV and IRR for each machine and select the best choice for the MIT Whitehead Institute.

Specify truth table for rom together with line converters : The 32 X 6 ROM together with the 2^0 line converts a 6-bit binary number to its corresponding 2-digit BCD number. For example, binary 100001 converts to BCD 011 0011 (decimal 33). Specify the truth table for the ROM.

Explain what is the potential at the center of the sphere : What is the potential at the center of the sphere, if we take the potential to be zero infinitely far from the sphere

Maximize staff availability and career expectations : Describe a scenario in which an MNE would maximize staff availability and career expectations, ROI, and knowledge transfer through an international assignment. Please be as creative as you like.

Estimate the investment in receivables : estimate the investment in receivables if net sales were $1,300,000 in 2011 d. how much of a change in the 2011 receivables occurred?

User Account

All Pages