Ask Experts Questions for FREE Help !
Ask
    musbvickey's Avatar
    musbvickey Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Apr 27, 2011, 06:23 PM
    net present value
    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's Avatar
    smoothy Posts: 25,490, Reputation: 2853
    Uber Member
    		  
    #2

    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.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Net Present Value [ 1 Answers ]

Hello- I'm working on the following question: Here is my work for finding NPV, I guess I'm unsure where I went wrong: Useful Life 8 years Cost of capital is 6% Equipment (308,000) * Now*1.000= (308000) Working Capital (50,000)*Now*1.000=(50000) Annual $ inflow 55,000*6.210-=341550...

Net present value [ 1 Answers ]

Project A requires an original investment of $65,000. The project will yield cash flows of $15,000 per year for seven years. Project B has a calculated net present value of $5,500 over a five year life. Project a could be sold at the end of five years for a price of $30,000. (a) Using the proper...

View more questions Search