Calculate the nvp and irr for trucks

Reference no: EM13160385

Davis Industries must choose between a gas powered and an electric-powered forklift truck for moving materials in its factory. Since both forklifts perform the same function, the firm will choose only one. (They are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less expensive to operate; it will cost $22,000, whereas the gas-powered truck will cost $17,500. The cost of capital that applies to both investments is 12%. The life for both types of truck is estimated to be 6 years, during which time the net cash flows for the electric-powered truck will be $6,290 per year and those for the gas-powered truck will be $5,000 per year. Annual net cash flows include depreciation expenses. Calculate the NVP and IRR for each type of trck, and decide which to recommend.

Reference no: EM13160385

Questions Cloud

Record interest using the effective-interest method : Record the two journal entries that should be recorded by McLean Company for the two purchases on January 1, 2011. Record the interest at the end of the first year on both notes using the effective-interest method.

Project operating cash flow for the first year : The company faces a 40% tax rate. What is the project's operating cash flow for the first year (t = 1)?

What is the volume of the balloon at the altitude : A helium-filled weather balloon has a volume of 714 L at 23 oC and 759 mmHg. It is released and rises to an altitude of 4.80 km, where the pressure is 495 mm Hg and the temperature is -9oC. what is the volume of the balloon at this altitude.

State what is the rate law : What is the rate law for step 2 of this reaction? Express your answer in standard MasteringChemistry notation. For example, if the rate law is type k*[A]*[C]^3.

Calculate the nvp and irr for trucks : Annual net cash flows include depreciation expenses. Calculate the NVP and IRR for each type of trck, and decide which to recommend.

Explain the difference between a low-level format : Why are there so many DVD formats?

Show how the amounts related to accoutns receivable : Show how the amounts related to Accoutns Receivable and Bad Debt Expense would be reported on the balance sheet and income statement for 2009.

Calculate the concentration of solution saturated with pb : Calculate the concentration of IO3- in a 3.02 mM Pb(NO3)2 solution saturated with Pb(IO3)2. The Ksp of Pb(IO3)2 is 2.5 × 10-13. Assume that Pb(IO3)2 is a negligible source of Pb2 compared to Pb(NO3)

Calculate the energy in joules and calories required : Calculate the energy in joules and calories required to heat 5.25 g of water from 5.5 oC to 64.8 oC.

User Account

All Pages