Reference no: EM132555016

Question 1) A company with $630,000 in operating assets is considering the purchase of a machine that costs $74,000 and which is expected to reduce operating costs by $20,000 each year. These reductions in cost occur evenly throughout the year. The payback period for this machine in years is closest to (Ignore income taxes.)

Question 2) Moates Corporation has provided the following data concerning an investment project that it is considering:

The Initial investment $ 390,000 Annual cash flow $ 127,000 per year Expected life of the project 4 years Discount rate 8 %

The net present value of the project is

Question 3) The management of Penfold Corporation is considering the purchase of a machine that would cost $320,000, would last for 5 years, and would have no salvage value. The machine would reduce labor and other costs by $76,000 per year. The company requires a minimum pretax return of 12% on all investment projects.

The net present value of the proposed project is