Solve each of the following independent cases (assume all cash flows are after-tax cash flows): 1. Thomas Company is investing $120,000 in a project that will yield a uniform series of cash inflows over the next four years. If the internal rate of return is 14 percent, how much cash inflow per year can be expected? 2. Video Repair has decided to invest in some new electronic equipment. The equipment will have a three-year life and will produce a uniform series of cash savings. The net present value of the equipment is $1,750 using a discount rate of 8 percent. The internal rate of return is 12 percent. Determine the investment and the amount of cash savings realized each year. 3. A new lathe costing $60,096 will produce savings of $12,000 per year. How many years must the lathe last if an IRR of 18 percent is realized? 4. The NPV of a project is $3,927. The project has a life of four years and produces the following cash flows: Year 1 $10,000 Year 3 15,000 Year 2 12,000 Year 4 ? The cost of the project is two times the cash flow produced in Year 4. The discount rate is 10 percent. Find the cost of the project and the cash flow for Year 4.
Solve each of the following independent cases (assume all cash flows are after-tax cash flows):
1. Thomas Company is investing $120,000 in a project that will yield a uniform series of cash inflows over the next four years. If the internal rate of return is 14 percent, how much cash inflow per year can be expected?
2. Video Repair has decided to invest in some new electronic equipment. The equipment will have a three-year life and will produce a uniform series of cash savings. The net present value of the equipment is $1,750 using a discount rate of 8 percent. The internal rate of return is 12 percent. Determine the investment and the amount of cash savings realized each year.
3. A new lathe costing $60,096 will produce savings of $12,000 per year. How many years must the lathe last if an IRR of 18 percent is realized?
4. The NPV of a project is $3,927. The project has a life of four years and produces the following cash flows:
| Year 1 | $10,000 | Year 3 | 15,000 |
| Year 2 | 12,000 | Year 4 | ? |
The cost of the project is two times the cash flow produced in Year 4. The discount rate is 10 percent. Find the cost of the project and the cash flow for Year 4.
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