Reference no: EM133069273

Questions -

Q1. Home Slice Pizza is considering investing in a new pizza oven. The machine will cost $480,000. The cash flows resulting from the investment are as follows: Year 1: $150,000; Year 2: $200,000; Year 3: $300,000; Year 4: $100,000; Year 5: $50,000. Calculate the IRR of the project.

Q2. Great Barbecue Corporation is thinking about investing in a new meat smoker. The cost of the machine is $300,000. The net cash flows resulting from the investment are as follows: Year 1: $20,000; Year 2: $200,000; Year 3: $400,000; Year 4: $10,000; Year 5: $5,000. The company's cost of capital is 20.00%. Compute the NPV of the project.

Q3. Munder Difflin Paper Disposal wants to buy another paper shredder to place closer to their target customers and make themselves more marketable. The machine will cost $8,500. The cash flows resulting from the investment are as follows: Year 1: $6,500; Year 2: $1,000; Year 3: $2,000, Year 4; $1,500. Calculate the IRR of the project.

Q4. Baby Pal Inc wants to invest in a batch of new rubber to raise the quality of their pacifiers. The cost of the rubber is $14,000. The net cash flows resulting from the investment are as follows: Year 1: $1,500; Year 2: $7,000; Year 3: $7,000; Year 4: $900. The company's cost of capital is 14%. Compute the NPV of the project.

Q5. Table Bottom wants to purchase a new saw that will make their tables smoother. The cost of the machine is $367,000. The net cash flows resulting from the investment are as follows: Year 1: $90,000; Year 2: $160,000; Year 3: $300,000; Year 4: $10,000. The company's cost of capital is 10.50%. Compute the NPV of the project.

Q6. Llama Lawn-a is considering buying a new high-end lawn mower. The mower will cost $20,000. The cash flows resulting from the investment are as follows: Year 1: $12,000; Year 2: $8,000; Year 3: $5,000; Year 4: $1,500; Year 5: $1,250. Calculate the IRR of the project.

Q7. Bobby's Italian Ice corporation is considering investing in a new Italian Ice machine. The machine will cost $500,000. The cash flows resulting from the investment are as follows: Year 1: $200,000; Year 2: $300,000; Year 3: $450,000]. Calculate the IRR of the project.

Q8. Forever Old Thrift Shop is considering renovating the entire store shopping area to attract more customers. The cost of the renovation is $10,000. The net cash flows resulting from the investment are as follows: Year 1: $4,000; Year 2: $3,000; Year 3: $2,000; Year 4: $1,500; Year 5: $500. Compute the payback period for this project.

Q9. ABC Corporation is considering investing in a new machine. The cost of the investment is $100,000. The net cash flows resulting from the investment are as follows: Year 1: $50,000; Year 2: $40,000; Year 3: $100,000. Compute the payback period for this project.

Q10. Printer Express Inc is considering investing in a new factory to build more printers and copy machines. The cost of the factory is $3,500,000. The net cash flows resulting from the investment are as follows: Year 1: $900,000; Year 2: $800,000; Year 3: $750,000; Year 4: $650,000; Year 5: $500,000; Year 6: $450,000. Compute the payback period for this project.