Question

ABC Is considering an investment in a machine that will generate costs and savings as shown Machine Cost ( 10 year life) $500,000 Current Monthly Costs Monthly Costs w new machine 12,000.00 6,500.00 The required rate of return is 8% Compute the npv, npv index and the irr of the above CCP can purchase a new pckg machine in lieu of its current machine Old Machine New Machine Hours per year Cost per hour Years of use sale of old machine Annual repairs 4,000 4,000 5.60 4.2 5 2,500 2,600 800 Cost of New Machine 14,000 Prepare a differential analysis The condensed income statement of XYZ is shown below Sales 3,600,000 Using the DuPont formula determine profit margin, inv turnover rate and rate of COS Admin Exp 2,160,000 540,000 Oper Inco 900,000 return on inv if $7.2M are invested in the division

Answer 1

Answer- iNPU stef-) Initial_Inves tmev Ncw MIC Step-2 l0000Yea DePneciation Yns Stefcal of Recuuing cashows Sawings in monthl cost fnmial Avmuit acton @g y. $$500 swings 661000 0eais 441421860 fess step-y cajof Nfv PN of cash into-Pv. $442860 ash o F NPV -$S7140 i)N PY Jndex -S,140 t 5,o0/000 S00/000 o.89

cal'of N at vauious ate b taia Ehen NPV Rate $9635 S 6 . 4234 23,869 o.O 2386J O. 40366 Sto.40366 5.40 '/ APmOx So,JRR wil be veity this as atERR NPy shall We Can (noss to zeio neal 6000X7572C 9 fu of cash o1F Spo00)

Answei-2 Cashouto CInitial IewE) 14/000 Z-JakS Cai imcnemental cash iior 4000 Hows sawmys X T3-6-4.2) Pei hous Annual nefain Cost Soas- 002220031 hyeos -Aseum ed 7400 x 6.14 $45,410 $3 1470 uSi4T0- 000 lesss y.of Sale of old MIC 2500 25SI NCt NfV 291918

Amswel-3 Padit Mengin 36,00100 (21,60 ,000) S401000 9,00 1000 Sa les ( OS (Admin ENS OP. Incom e Ph 974 25'/ I/00,000 Sale 30100 000 Sales Total Tunmoves Nate Jwvt Tolal Reverlc 7270010ad 0.S 367001000 72,00,000 Assct Net income X ROE Avg.cH ETwity ASsel Sales 97607000 Asset tunove nuHo X ROE x o. S 501 2-So