1. A project has an initial cost of $50,000, expected net cash inflows of $10,000 per year for 9 years, and a cost of ca

[answerhappygod]

1.
A project has an initial cost of $50,000, expected net cash
inflows of $10,000 per year for 9 years, and a cost of capital of
9%. What is the project's NPV? (Hint: Begin by
constructing a time line.) Do not round intermediate calculations.
Round your answer to the nearest cent.
2.
Davis Industries must choose between a gas-powered and an
electric-powered forklift truck for moving materials in its
factory. Because both forklifts perform the same function, the firm
will choose only one. (They are mutually exclusive investments.)
The electric-powered truck will cost more, but it will be less
expensive to operate; it will cost $21,000, whereas the gas-powered
truck will cost $17,230. The cost of capital that applies to both
investments is 11%. The life for both types of truck is estimated
to be 6 years, during which time the net cash flows for the
electric-powered truck will be $6,100 per year, and those for the
gas-powered truck will be $5,300 per year. Annual net cash flows
include depreciation expenses. Calculate the NPV and IRR for each
type of truck, and decide which to recommend. Do not round
intermediate calculations. Round the monetary values to the nearest
dollar and percentage values to two decimal places.
3.
The Campbell Company is considering adding a robotic paint
sprayer to its production line. The sprayer's base price is
$930,000, and it would cost another $19,000 to install it. The
machine falls into the MACRS 3-year class, and it would be sold
after 3 years for $569,000. The MACRS rates for the first three
years are 0.3333, 0.4445, and 0.1481. The machine would require an
increase in net working capital (inventory) of $12,500. The sprayer
would not change revenues, but it is expected to save the firm
$387,000 per year in before-tax operating costs, mainly labor.
Campbell's marginal tax rate is 25%. (Ignore the half-year
convention for the straight-line method.) Cash outflows, if any,
should be indicated by a minus sign. Do not round intermediate
calculations. Round your answers to the nearest dollar.
What is the Year-0 net cash flow?
$
What are the net operating cash flows in Years 1, 2, and 3?
What is the additional Year-3 cash flow (i.e, the after-tax
salvage and the return of working capital)?
$
If the project's cost of capital is 10%, what is the NPV of the
project?
$