1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Vinvika [58]
1 year ago
10

Compute the net present value of each project. Which project should be adopted based on the net present value approach?

Mathematics
1 answer:
denis-greek [22]1 year ago
8 0

Based on the cashflows to projects A and B, the rate of return, and the period of investment, the project that should be picked by Rundle Enterprises based on net present value is Project A.

The project that should be picked based on Internal rate of return is Project A.

<h3>What are the project net present values:</h3>

Project A's net present value is:

= Present value of cash flows - Initial cash expenditure

= (36,113 x present value interest factor for an annuity, 8%, 5 years) - 108,000

= 36,113 x 3.99271 - 108,000

= $36,188.74

Project B's net present value is:

= 9,612 x 3.99271 - 33,000

= $5,377.93

Project A should therefore be picked as it has the higher net present value.

<h3>What are the project Internal Rate of Returns?</h3>

The rate of return can be found using a spreadsheet as shown attached by using the IRR function.

Project A IRR is 20%.

Project B IRR is 14%.

The IRR rule calls for picking the project with a higher IRR which will be Project A.

Full question is:

Dwight Donovan, the president of Rundle Enterprises, is considering two investment opportunities. Because of limited resources, he will be able to invest in only one of them. Project A is to purchase a machine that will enable factory automation; the machine is expected to have a useful life of five years and no salvage value. Project B supports a training program that will improve the skills of employees operating the current equipment. Initial cash expenditures for Project A are $108,000 and for Project B are $33,000. The annual expected cash inflows are $36,113 for Project A and $9,612 for Project B. Both investments are expected to provide cash flow benefits for the next five years. Rundle Enterprises’ desired rate of return is 8 percent.

Find out more on the Internal Rate of Return at brainly.com/question/17185302

#SPJ1

You might be interested in
A Circuit has a 5000 V power supply(AC), A load resistance of 4 ohms and open switch how much Current will flow in a circuit as
mezya [45]

Answer:

1250 amps

Step-by-step explanation:

V = 5000 V

R = 4 ohms

Use ohms law: V = IR

5000 =I(4)

I = 1250 amps

8 0
2 years ago
Simplify: 10(-5x+4) A 5x + 4 B - 50x + 4 - 50x + 40 5x + 40​
ELEN [110]

Answer:

-50x+40

Step-by-step explanation:

4 0
2 years ago
4 + 2x - 7 = 12<br><br> ?????
Rainbow [258]

Answer:

15/2

Step-by-step explanation:

7 0
2 years ago
Read 2 more answers
Can someone answer this question for me ?
arsen [322]

Answer:

I believe the answer is 3/10

5 0
2 years ago
Read 2 more answers
R^2+8r=-7<br>solve the equation with the quadratic formula showing work
Yuliya22 [10]

Answer:

Step-by-step explanation:

r²+8r=−7

Step 1: Subtract -7 from both sides.

r²+8r−(−7)=−7−(−7)

r²+8r+7=0

Step 2: Use quadratic formula with a=1, b=8, c=7.

r=r=\frac{-b+or-\sqrt{-4ac}  }{2a}

r=\frac{-8+or-\sqrt{(8})^2-4(1)(7) }{2(1)}

7 0
3 years ago
Other questions:
  • 10x - y = 2<br> 5x + 3y = 5 --
    14·1 answer
  • A company can produce 300 ballpoint pens and 550 gel pens each hour . each weekday,the company produces ballpoint pens for 5 hou
    5·1 answer
  • 144 out of 600 students took Business Mathematics. What percent of students did not take the course?
    9·2 answers
  • Need help on this two column proof for geometry
    9·1 answer
  • Steph Curry scored 62 points in 36 minutes of playing time. What was the unit rate? (points per minute)
    7·1 answer
  • Mr. Baker is driving 100 miles. His average speed, to the nearest 2 miles per hour, is 56 miles per hour. What is the range of p
    13·1 answer
  • Please help me ... I neddddd helpppp.
    9·1 answer
  • The ratio of fiction books to non-fiction
    7·1 answer
  • LA= LD<br> True or false
    8·2 answers
  • Please help<br><br> Select the expressions equivalent to 18 + 3r.
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!