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
FromTheMoon [43]
3 years ago
13

Zachary Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the compan

y’s cash outflow for operating expenses by $1,287,000 per year. The cost of the equipment is $9,187,846.67. Zachary expects it to have a 11-year useful life and a zero salvage value. The company has established an investment opportunity hurdle rate of 15 percent and uses the straight-line method for depreciation. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)
Required:
a. Calculate the internal rate of return of the investment opportunity. (Do not round intermediate calculations.)
b. Indicate whether the investment opportunity should be accepted.
1. Internal Rate of Return
2. Should the investment opportunity be accepted?
Business
2 answers:
Svet_ta [14]3 years ago
6 0

Answer:

IRR = 8%

Don't accept the project

Explanation:

The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.

IRR can be calculated using a financial calculator:

Cash flow in year 0 = -9,187,846.67

Cash flow each year from year 1 to 11 = 1287000

IRR = 8%

Because the IRR is less than the hurdle rate, the project shouldn't be accepted.

To find the IRR using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.

I hope my answer helps you

AveGali [126]3 years ago
4 0

Answer:

a) IRR

IRR = 9%

b)

Since the IRR is less than the hurdle rate , the project should be rejected. An IRR with higher than the hurdle rate implies that the project would decrase the wealth of ths shareholders

Explanation:

IRR = a% + ( NPVa/(NPVa + NPVb)× (b-a)%

NPV = PV of annual savings - initial cost

PV of annual savings = A× (1- (1+r)^(-n) )/r

A- annual savings in operating cost , r- rate of return, n- number of years

NPVa

PV of annual savings = 1,287,000 × (1- 1.15^(-11))/0.15=  6,735,787.15  

NPV = 6,735,787.15   - 9,187,846.67.= 2,452,059.52  

NPVb

PV of annual savings  =  (1,287,000 × (1- 1.03^(-11))/0.03=11908127.23

NPV b = 11908127.23 -9187846.67 =2720280.564

IRR = 3% + ( 2720280.564 /(2720280.564 +2,452,059.52) )× (15-3)%

IRR = 9%

Since the IRR is less than the hurdle rate , the project should be rejected. An IRR with higher than the hurdle rate implies that the project would decrase the wealth of ths shareholders

You might be interested in
Forest ranger in Arizona and New Mexico in the early 1900s who advocated preservation of nautre's integrity. He wrote "...to kee
GenaCL600 [577]

Forest ranger in Arizona and New Mexico in the early 1900s who advocated preservation of nautre's integrity. He wrote "...to keep every cog and wheel is the first precaution of intelligent tinkering..." also known as the Land Ethic

B. Aldo Leopold

Explanation:

  • Forest ranger in Arizona and New Mexico in the early 1900s who advocated preservation of nautre's integrity. He wrote "...to keep every cog and wheel is the first precaution of intelligent tinkering..." also known as the Land Ethic
  • B. Aldo Leopold
  • Aldo Leopold is the only person who has said this line. It is also related to the facts given that Aldo was considered by many  as the of wildlife management.
  • he also had long arguement about that wilderness was vitally important to protect both for and from humans.

8 0
3 years ago
Read 2 more answers
Ryan is a human resource manager at Remfur Inc. The top management of the firm instructs him to recruit employees for the newly
marissa [1.9K]

Answer: Option B

Explanation: In the given case, Remfur inc. specifically wanted their HR Ryan to recruit such employees for the new division that may bought new ideas and perspectives in the company, thus, external source of recruitment should be used by Ryan instead of internal sources like transfer or promotion etc.

Hence, Option B, posting advertisement in the newspaper is the right answer, as the new employees from outside the entity will bring new ideas since the current employees will be used to working in the existing operational structure.

3 0
3 years ago
True or false: the term economic investment includes purchasing stocks, bonds, and real estate.
Lapatulllka [165]
False because it doesnt invest the stocks
6 0
3 years ago
True or false: An unchanging marketing communication program is critical to the success of every company. True false question. T
Rina8888 [55]

Answer:

false

Explanation:

you keep changing to what the people want because that t what the will buy new ideas because someone else will.

3 0
3 years ago
identify a correct statement according to those who believe that regulation of discrimination and other areas of employment rela
Firdavs [7]

An accurate statement according to individuals who trust that regulation of discrimination and other areas of the employment relationship is vital: financial forces do not have the funds for absolute safety against employment discrimination on the basis of race, gender, nationality, or different covered categories.

Employment is described as what you do as a paying job. An instance of employment is running for an espresso save. The definition of employment is the quantity or percent of humans who've jobs. An instance of employment is the share of citizens with paying jobs indexed kingdom by means of the country.

A career by way of which someone earns a dwelling; paintings; enterprise. the full quantity of people gainfully hired or running. an activity or the like that occupies someone's time: She located knitting a comforting employment for her idle hours. Paints and employment may be used indistinctly in normal language, however, for the labor marketplace, they imply very different things. Employment is a totally particular form of work. other styles of work consist of personal-use production work, volunteer paintings, and unpaid trainee paintings.

Learn more about employment here:

brainly.com/question/1991900

#SPJ4

7 0
2 years ago
Other questions:
  • Jim holds a commercial lease. Last year his rent went up 4% based on a 4% increase in the wholesale price index. What type of le
    9·1 answer
  • One study of 195 critical incidents in banking and medical settings showed that a major difference between effective and ineffec
    14·1 answer
  • Which of the following events will directly cause the U.S. money supply to rise by $400 million?
    12·1 answer
  • Solve the problem below using the intuitive least cost method and answer the following: Cranbury Plainfield Saddle Brook Supply
    5·1 answer
  • On January 1, 2018, Martinez Inc. granted stock options to officers and key employees for the purchase of 22,000 shares of the c
    13·1 answer
  • You win the lottery and decide to impress your friends by exhibiting a million-dollar cube of gold. at the time, gold is selling
    9·1 answer
  • An investor can trade Foreign Currency Options on all of the following EXCEPT:
    15·1 answer
  • If Management was not concerned with the time value of money, from which two capital budgeting methods should they choose?
    9·1 answer
  • A company pays $20,000 for the rights to a well with 5 million gallons of water. If the company extracts 250,000 gallons of wate
    10·1 answer
  • The impacts of increasing petrol price on household​
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!