4. Gran's Cleaning Service would like to purchase an ultrasound machine for cleaning window blinds. It would cost P 236,000. Freight cost is P 2,300, Installation cost is 3,500 and the Training cost for the employees is 4,500. Gran estimated that the machine would increase the company's cash flows, net of expense by 32,000 per year. The machine has a 10-year useful life with no salvage value. a) Compute for the machine's internal rate of return to the nearest whole percent. b) Compute the machine's net present value at 5%.

4. Gran's Cleaning Service would like to purchase an ultrasound machine for cleaning window blinds. It would cost P 236,000. Freight cost is P 2,300, Installation cost is 3,500 and the Training cost for the employees is 4,500. Gran estimated that the machine would increase the company's cash flows, net of expense by 32,000 per year. The machine has a 10-year useful life with no salvage value. a) Compute for the machine's internal rate of return to the nearest whole percent. b) Compute the machine's net present value at 5%.

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter10: Project Cash Flows And Risk

Section: Chapter Questions

Problem 5PROB

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