Bunnings Ltd is considering to invest in one of the two following projects to buy a new equipment. Each equipment will last 5 years and have no salvage value at the end. The company’s required rate of return for all investment projects is 8%. The cash flows of the projects are provided below.Equipment 1 Equipment 2Cost $186,000 $195,000Future Cash FlowsYear 1Year 2Year 3Year 4Year 586 00093 00083 00075 00055 00097 00084 00086 00075 00063 000Identify which option of equipment should the company accept based ondiscounted pay back method if the payback criterion is maximum 2 years?

Q: TransITRI is a transportation company with a recent need of a new construction equipment at a first…

A: The calculation of different cashflows for different years is shown in below table:

Q: TransITRI is a transportation company with a recent need of a new construction equipment at a first…

A: Present worth can be calculated by taking the difference of present value of cash inflow and present…

Q: Win Corporation is considering to replace its old equipment with a new one. The old equipment had a…

A: The net amount of investment is equal to original amount of investment minus cash inflow at the time…

Q: Giant Shipping Ltd is considering to invest in one of the two following projects to buy a new…

A: Profitability Index = Present Value of future cashflow/Initial Investment Payback Period = Years…

Q: Vista Limited intends purchasing a new machine and has a choice between the following two machines:…

A: Initial Cost of equipment A = R220,000 Initial Cost of equipment B = R240,000 Expected life = 5…

Q: What is the payback period on this equipment?

A: Payback Period: The period in which the cost of the project is recovered is called the payback…

Q: Baird Bros. Construction is considering the purchase of a machine at a cost of $202,000. The machine…

A: Answer a) Calculation of Net Present Value of Cash Flows Net Present Value = Present value of cash…

Q: Quantum Corp. is considering purchasing a new milling machine with a useful life of 6 years. The…

A: Payback period is the number of years the project takes to recover its initial investment. formula:…

Q: The Bokawkan company is considering to purchase a new machine. Annual cash returns on investment…

A: Calculation of Payback Period= Initial Investment / Annual Cash Inflow= P1,200,000 / P220,000= 5.455…

Q: "It is estimated that a certain piece of equipment can save $22145 per year in labor and materials…

A: Annual saving (A) = $22145 r = 15.96% n = 6 years Let X = Justified price today

Q: A company is considering a machine acquisition. The new machine will cost $ 60.000 and the shipping…

A: Investment Cash flow:- It includes inflow and outflow of cash from the sale and purchase of…

Q: Wright Corp. Is considering the purchase of a new plece of equipment, which would have an Initial…

A: The question is based on the concept of Financial Management. Payback period is the period in which…

Q: The Books Company plans to invest in a duplicating machine that costs P120,000. The following are…

A: Solution: Year Cash Flow Cumulative Cash flow Salvage value Cumulative Payback 1…

Q: The Company is considering investing in two alternative projects: ​ Project 1 Project 2 Investment…

A: The payback period refers to the period that is required to recover the initial cost. With the help…

Q: Berry Products is considering two pieces of machinery. The first machine costs P50,000 more than the…

A: When the present value of both the machines would be the same, that discount rate would be…

Q: The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000.…

A: Formulas: Profitability index = Present value of cash inflows / Cash outflow Profitability index…

Q: MNO company is evaluating a proposal for purchase of equipment which will cost S180,000. The cash…

A: Initial investment  is $180,000    (Purchase cost of equipment)        Year        Cash inflows…

Q: Magsaysay Company is evaluating an investment that would have an eight-year life and would require a…

A:

Q: Brady Corp. is considering the purchase of a piece of equipment that costs $20,000. Projected net…

A: Unrecovered cost at the start of the year Cash flow during the year =  $20,000 - $3,000 -…

Q: a company can buy a machine that is expected to have a three-year life and a 30,000 salvage value.…

A: Net Present Value: It is the present worth today of the project having the initial cost and annual…

Q: The management of River Corporation is considering the purchase of a new machine costing $380,000.…

A: Payback(PB) Period shows time period required to recover initial outlay of proposal from periodic…

Q: Giant Machinery Ltd is considering to invest in one of the two following Projects to buy a new…

A: Formulas: Net present value(NPV) = Present value of cash inflows - Present value of cash outflow…

Q: The Company is evaluating investing in a new metal stamping machine costing $80,458. The Company…

A: Internal rate of return, IRR is the discount rate where the present value of inflows equals present…

Q: certain piece of equipment can save $16820 per year in labor and materials costs. The equipment has…

A: The given problem can be solved using PV function in excel. PV function computes present worth/…

Q: (For this question you must show your work!) A business is considering investing in specialized…

A: payback period = amount to be invested / estimated annual net cash flow. Payback period is the…

Q: Giant Machinery Ltd is considering to invest in one of the two following Projects to buy a new…

A: a. ------------------------------------------ Project 1: NPV $98,114.37 Project 2: NPV $96,841.94…

Q: Bunnings Ltd is considering to invest in one of the two following projects to buy a new equipment.…

A: a) The profitability index (PI), then again alluded to as the value investment ratio (VIR) or profit…

Q: The management of NUBD Co. is considering the purchase of a new machien costing P400,000 with a…

A: Average rate of return or accounting rate of return is technique in capital budgeting which is used…

Q: Osler Company is considering an investment with the following data: Initial cost $200,000…

A: Initial cost = $ 200,000 Annual net cash inflows = $ 25000 Life = 10 Years Annual depreciation =…

Q: Kittymae Co. wants to purchase a machine for P400,000, but needs to earn an 8% return. The expected…

A: Here we will use the rate of 8% to compute the NPV. NPV = sum of all PVs. PV = cash flow in a year *…

Q: MNO company is evaluating a proposal for purchase of equipment which will cost $180,000. The cash…

A: MNO Company's Purchase cost of equipment = $180000 Cash inflows from use of equipment are Year 1 =…

Q: Machinery Ltd is considering to invest in one of the two following Projects to buy a newequipment.…

A: The payback period refers to the amount of time it takes to recover the cost of an investment.…

Q: TransITRI is a transportation company with a recent need of a new construction equipment at a first…

A: The machine has an economic life of 7 years.The MARR is 16%.The below table shows the calculation of…

Q: Bunnings Ltd is considering to invest in one of the two following projects to buy new equipment.…

A: The discounted payback period is the time period in which the project will be able to generate…

Q: TransITRI is a transportation company with a recent need of a new construction equipment at a first…

A: The machine has a economic life of 8 years.The function given for cash flow before tax can be used…

Q: Giant Machinery Ltd is considering to invest in one of the two following Projects to buy a…

A: Given information: Initial cost of Project 1 is -$175,000 Initial cost of Project 2 is -$185,000…

Q: Homer Corp. is considering the purchase of a new piece of equipment. The cost savings from the…

A: Formula: Annual Net cash flow = Annual income after-tax + Annual depreciation where, Annual…

Q: Bunnings Ltd is considering to invest in one of the two following projects to buy a new equipment.…

A: Profitability index Profitability index is an capital budgeting tool calculated by dividing present…

Q: Machinery Ltd is considering to invest in one of the two following Projects to buy a newequipment.…

A: Net present value is the value of an asset which takes investment made into account before…

Q: Your company, MCU Inc., is considering a new project whose data are shown below. What is the…

A: Cash flow means net cash and cash equivalent transferred in or out of the organization.

Q: MNO company is evaluating a proposal for purchase of equipment which will cost $180,000. The cash…

A: Payback periods means the time taken by the equipment to completes the cost of the it. It is the…

Q: The management of XYZ Beverage Company is considering to purchase a new equipment to increase the…

A: Payback period: It can be defined as the time that is taken by an investment before it starts…

Q: The management of XYZ Beverage Company is considering to purchase a new equipment to increase the…

A: Annual Net cash inflows = Annual cash inflows - (Cost of ingredients + Salaries expense +maintenance…

Q: The firm’s is considering an investment in some additional equipment. The equipment has a net cost…

A: Initial cost (C) = ₱600000 Annual cash inflow (A) = ₱128000