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musbvickey
Apr 27, 2011, 06:23 PM
The Pam American Bottling Co. is considering the purchase of a new machine that would increase the speed of bottling and save money. The new cost of this machine is $45,000. The annual cash flows have the following projections.

Year Cash flow
1 $15,000
2 $20,000
3 $25,000
4 $10,000
5 $5,000
a. If the cost of capital is 10%, what is the net present value of selecting a new machine?

b. What is the internal rate of return (IRR)?


c. Should the project be accepted? Why?

smoothy
Apr 27, 2011, 07:20 PM
Since you didn't bother to read the rules and want someone else to do your work for you so you can play your play station longer... I am posting the rules.


Read this first: Expectations for the Homework Help board
Do not simply retype or paste a question from your book or study material

We won't do your homework questions for you.
You were given the assignment for you to learn.

If you come up with your own answer and post it for us to critique that is within reason.

If you have some SPECIFIC questions that you couldn't find or didn't understand, we may help with that.
But this is your assignment, so show us you have at least attempted to complete it on your own.

Thank you.