Reference no: EM133126891
Questions -
Q1. Muncy, Inc., is looking to add a new machine at a cost of $4,133,250. The company expects this equipment will lead to cash flows of $816,322, $863,275, $937,250, $1,019,612, $1,212,960, and $1,225,000 over the next six years. If the appropriate discount rate is 15 percent, what is the NPV of this investment?
Q2. An investment of $83 generates after-tax cash flows of $50.00 in Year 1, $66.00 in Year 2, and $129.00 in Year 3. The required rate of return is 20 percent. The net present value is?
Q3. McKenna Sports Authority is getting ready to produce a new line of gold clubs by investing $1.85 million. The investment will result in additional cash flows of $525,000, $812,500, and $1,215,000 over the next three years. What is the payback period for this project?
Q4. Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project?
|
Year
|
Project
|
|
0
|
($11,368,000)
|
|
1
|
$2,172,589
|
|
2
|
$3,787,552
|
|
3
|
$3,200,650
|
|
4
|
$4,115,899
|
|
5
|
$4,556,424
|
Round to two decimal places.