(Solution) 14) The Pan American Bottling Co. Is Considering The Purchase Of A New Machine That Would Increase The Speed Of Bottling And Save Money. The Net Cost... | Snapessays.com


(Solution) 14) The Pan American Bottling Co. is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost...


14) The Pan American Bottling Co. is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost of this machine is $72,000. The annual cash flows have the following projections. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.   Year Cash Flow 1 $ 35,000   2 38,000   3 35,000   4 28,000   5 12,000      a. If the cost of capital is 12 percent, what is the net present value of selecting a new machine? (Do not round intermediate calculations and round your final answer to 2 decimal places.)     Net present value $       b. What is the internal rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)       Internal rate of return  %     c. Should the project be accepted?       Yes No

 


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This question was answered on: May 23, 2022

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