Rieger International is evaluating the feasibility of investing 94,000 in a piece of equipment...
Rieger International is evaluating the feasibility of investing $94,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown in the following table:
| Year (t) | Cash inflows (CF) |
1 | $40,000 |
2 | $40,000 |
3 | $25,000 |
4 | $25,000 |
5 | $20,000 |
The firm has a 11% cost of capital.
a. Calculate the payback period for the proposed investment.
b. Calculate the net present value (NPV) for the proposed investment.
c. Calculate the internal rate of return (IRR), rounded to the nearest whole percent, for the proposed investment.
d. Evaluate the acceptability of the proposed investment using NPV and IRR. What recommendation would you make relative to implementation of the project?
Homework Answers
Add Answer to:
Rieger International is evaluating the feasibility of investing 94,000 in a piece of equipment...
Rieger International is evaluating the feasibility of investing $121,000 in a piece of equipment that has...
Rieger International is evaluating the feasibility of investing $121,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown in the following table: The firm has a 9% cost of capital Year (t) Cash inflows (CF) 1 $30,000 2 $40,000 3 $40,000 4 $40,000 5 $25,000 a. Calculate the payback period for the proposed investment. b. Calculate the net present value (NPV) for the proposed investment. c. ...
Payback, NPV, and IRR Rieger International is evaluating the feasibility of investing $103,000 in a piece...
Payback, NPV, and IRR Rieger International is evaluating the feasibility of investing $103,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown in the following table: B . The firm has a 9% cost of capital. a. Calculate the payback period for the proposed investment. b. Calculate the net present value (NPV) for the proposed investment. c. Calculate the internal rate of return (IRR), rounded to...
Payback, NPV, and IRR Rieger International is evaluating the feasibility of investing $85,000 in a piece...
Payback, NPV, and IRR Rieger International is evaluating the feasibility of investing $85,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown in the following table . The firm has a 12% cost of capital. a. Calculate the payback period for the proposed investment b. Calculate the net present value (NPV) for the proposed investment. c. Calculate the internal rate of return (IRR), rounded to the...
Rieger International is attempting to evaluate the feasibility of investing $93,000 in a piece of equipment...
Rieger International is attempting to evaluate the feasibility of investing $93,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposal as: The firm has a 12% cost of capital. 1 $30,000 2 $25,000 3 $30,000 4 $35,000 5 $35,000 a. Calculate the payback period for the proposed investment in years and months b. Calculate the net present value (NPV) for the proposed investment. c. Calculate the internal rate...
Rieger International is attempting to evaluate the feasibility of investing $83,000 in a piece of equipment...
Rieger International is attempting to evaluate the feasibility of investing $83,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposal as: The firm has a 9% cost of capital. 1 $20,000 2 $30,000 3 $20,000 4 $40,000 5 $20,000 a. Calculate the payback period for the proposed investment. b. Calculate the net present value (NPV) for the proposed investment. c. Calculate the internal rate of return (IRR), rounded...
Rieger International is attempting to evaluate the feasibility of investing $95,000 in a piece of equipment...
Rieger International is attempting to evaluate the feasibility of investing $95,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposalas shown in the following table. The firm has a 12% cost of capital.Year (t) Cash inflows (CFt)1 $20,0002 25,0003 30,0004 35,0005 40,000a. Calculate the payback period for the proposed investment.b. Calculate the net present value (NPV) for the proposed investment.c. Calculate the internal rate of return (IRR), rounded...
Evergreens Corp. is attempting to evaluate a $129,000 investment in a machine with a 5-year life....
Evergreens Corp. is attempting to evaluate a $129,000 investment in a machine with a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown below. The firm has a 10% cost of capital End of Year (t) Cash Inflows (CF) $15,000 22,000 29,000 32,500 38,000 a. Calculate the payback period for the proposed investment. (2 points) b. Calculate the NPV for the proposed investment. (2 point) c. Calculated the IRR for the proposed investment. (2...
NPV and IRR analysis of projects Thomas Company is considering two mutually exclusive projects. The firm,...
NPV and IRR analysis of projects Thomas Company is considering two mutually exclusive projects. The firm, which has a cost of capital of 14%, has estimated its cash flows as shown in the following table: a. Calculate the NPV of each project, and assess its acceptability. b. Calculate the IRR for each project, and assess its acceptability. a. The NPV of project A is $ (Round to the nearest cent.) Х i Data Table (Click on the icon located on...
1) ABC Yarn Company is evaluating buying a piece of equipment. The cost of the equipment...
1) ABC Yarn Company is evaluating buying a piece of equipment. The cost of the equipment is $40,000 and has a four year useful life. The equipment is expected to generate $16,000 of revenue per year for 4 years. There will be supply expenses of $2,000 a year, maintenance cost of $600 annually Using an 8% discount rate/hurdle rate calculate the IRR and NPV for proposed equipment purchase. Ignore taxes and inflation. What decision should be made. Why?
All techniques, conflicting rankings Nicholson Roofing Materials, Inc., is considering two mutually exclusive projects, each with...
All techniques, conflicting rankings Nicholson Roofing Materials, Inc., is considering two mutually exclusive projects, each with an initial investment of $160,000. The company's board of directors has set a 4-year payback requirement and has set its cost of capital at 10%. The cash inflows associated with the two projects are shown in the following table: 0 Data Table a. Calculate the payback period for each project. Rank the projects by payback period. b. Calculate the NPV of each project. Rank...
Payback, NPV, and IRR Rieger International is evaluating the feasibility of investing $103,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown in the following table: B . The firm has a 9% cost of capital. a. Calculate the payback period for the proposed investment. b. Calculate the net present value (NPV) for the proposed investment. c. Calculate the internal rate of return (IRR), rounded to...
Payback, NPV, and IRR Rieger International is evaluating the feasibility of investing $85,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown in the following table . The firm has a 12% cost of capital. a. Calculate the payback period for the proposed investment b. Calculate the net present value (NPV) for the proposed investment. c. Calculate the internal rate of return (IRR), rounded to the...
Evergreens Corp. is attempting to evaluate a $129,000 investment in a machine with a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown below. The firm has a 10% cost of capital End of Year (t) Cash Inflows (CF) $15,000 22,000 29,000 32,500 38,000 a. Calculate the payback period for the proposed investment. (2 points) b. Calculate the NPV for the proposed investment. (2 point) c. Calculated the IRR for the proposed investment. (2...
NPV and IRR analysis of projects Thomas Company is considering two mutually exclusive projects. The firm, which has a cost of capital of 14%, has estimated its cash flows as shown in the following table: a. Calculate the NPV of each project, and assess its acceptability. b. Calculate the IRR for each project, and assess its acceptability. a. The NPV of project A is $ (Round to the nearest cent.) Х i Data Table (Click on the icon located on...
1) ABC Yarn Company is evaluating buying a piece of equipment. The cost of the equipment is $40,000 and has a four year useful life. The equipment is expected to generate $16,000 of revenue per year for 4 years. There will be supply expenses of $2,000 a year, maintenance cost of $600 annually Using an 8% discount rate/hurdle rate calculate the IRR and NPV for proposed equipment purchase. Ignore taxes and inflation. What decision should be made. Why?
All techniques, conflicting rankings Nicholson Roofing Materials, Inc., is considering two mutually exclusive projects, each with an initial investment of $160,000. The company's board of directors has set a 4-year payback requirement and has set its cost of capital at 10%. The cash inflows associated with the two projects are shown in the following table: 0 Data Table a. Calculate the payback period for each project. Rank the projects by payback period. b. Calculate the NPV of each project. Rank...
Most questions answered within 3 hours.
-
In the Metric System, the basic unit of measurement for length
is ___
In the Metric...
asked 1 minute from now -
A sample of C3H8 has 1.60×1024 H atoms.
How many carbon atoms does the sample contain?...
asked 4 minutes ago -
Discuss the sales orders process module(s) in the Enterprise
Resource Planning system. How does it contribute...
asked 7 minutes ago -
The position in an object as a function of time is given as ?
(?) =...
asked 8 minutes ago -
Design a class for python named PersonData with the following
member variables:
lastName
firstName
address
city...
asked 21 minutes ago -
How does use of the risk/need/responsivity model impact
effective rehabilitation services?
asked 25 minutes ago -
Your rich uncle has just given you a high school graduation
present of $900,000. The present,...
asked 28 minutes ago -
1=Write a program in C to get 16-bit data from Port-D and send
it to ports...
asked 26 minutes ago -
Calculate Ecell for the following reaction and conditions: 0.50
M Br2 (aq), 0.10 M Pb+2 (aq),...
asked 47 minutes ago -
There can be more than one correct answer.
Hypophysiotropic hormones:
A. released by the hypothalamus
B....
asked 52 minutes ago -
Scott Ruskin is the CEO of Decatur Materials. The company has
been struggling for the last...
asked 50 minutes ago -
If you were conducting a study involving twins regarding
genetics and/or upbringing, which would you use?...
asked 1 hour ago