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
nirvana33 [79]
3 years ago
11

The Allied Group is considering two investments. The first investment involves a packaging machine, which can be used to package

garments for shipping orders to customers. The second possible investment would be a molding machine that would be used to mold the mannequin parts.
The first possible investment is the packaging machine, which will cost $14,000. The second investment, the molding machine, would cost $12,000. The expected cash flows for the two projects are given below and the cost of capital to the firm is 15%. Both machines will be unusable after five years and have no salvage value.
The net cash flows for the two possible projects are given in the following table:
Year Packaging Machine Molding Machine
0 ($14000) ($12,000)
1 4100 3200
2 3300 2800
3 2900 2800
4 2200 2200
5 1200 2200
Address all of the following questions in a brief but thorough manner.
1. Calculate each project's payback period.
2. Calculate the NPV for each project.
3. Calculate the IRR for each project.
4. If the two projects are independent of each other, which projects, if any, should be selected? Explain why or why not.
5. If the two projects are mutually exclusive, which project, if any, should be selected? Explain why.
Business
1 answer:
Lemur [1.5K]3 years ago
3 0

Answer:

1. Calculate each project's payback period.

Payback period packaging machine = the positive cash flows are lower than the initial outlay

Payback period molding machine = 4.45 years

2. Calculate the NPV for each project.

Using a financial calculator

NPV for packaging machine = -$4,178.24

NPV for molding machine = -$2,907.50

3. Calculate the IRR for each project.

IRR for packaging machine = -0.86%

IRR for molding machine = 3.5%

4. If the two projects are independent of each other, which projects, if any, should be selected? Explain why or why not.

None should be selected since the NPVs are negative

5. If the two projects are mutually exclusive, which project, if any, should be selected? Explain why.

None should be selected since the NPVs are negative

You might be interested in
Interest rates are expressed as a percentage of ?
Mashcka [7]

Answer:

The interest rate is the amount a lender charges a borrower and is a percentage of the principal—the amount loaned. The interest rate on a loan is typically noted on an annual basis known as the annual percentage rate (APR).

Explanation:

<em>hope this helps</em>

8 0
2 years ago
According to the article by Hutchinson, Farris and Anders (2007), cash-to-cash analysis is difficult because financial data and
Margarita [4]

Answer:

False

Explanation:

"Cash-to-cash Analysis and Management" by<em> Hutchinson, Farris and Anders</em> talks about the availability of the<em> financial data</em> and <em>computer technology</em> in assisting a business when it comes to determining its <u>cash-to-cash position </u><em><u>(C2C)</u></em><em>,</em> as well as the <em>benchmarks</em> needed for comparison.

Cash-to-cash analysis was difficult in the past, however, it is easier nowadays. The supply chain is even examined at a broader view than before. C2C efficiency is possible by utilizing the<em> readily available</em> financial date and computer technology. So, this makes the statement above as "false."

So, this explains the answer.

6 0
3 years ago
A company's strategy evolves over time as a consequence of : Select one: a. The need to keep strategy in step with changing mark
Ksju [112]

Answer:

The correct answer is the option D: All of the above.

Explanation:

To begin with, a company's primary strategy that focus on completing the main goal of the company of increasing the sales and with that the profits is considered to be the most important element that the business has in order to keep existing and therefore that as the time passes and the context around the organization changes, that strategy evolves. And there are a lot of reasones why that could happen, including the market conditions that vary over the pass of years as well as the need to react to the competitors decisions in order to keep fighting for the market. And other consequence that may help the change of the strategy is the effort itself of managers to make the strategy better as ideas turn to came out.

3 0
3 years ago
LO 1.1Which of the following is false regarding strategic planning?
Studentka2010 [4]

Answer:

It is the sole responsibility of supervisors.

Explanation:

Strategic planning includes setting objectives or goals and allocating resocurces to achieve set goals. The goals could be long or short term.

Strategic planning can span for years.

The strategic goals would vary from company to company because the aims and objectives of companies differ.

I hope my answer helps you.

8 0
3 years ago
All of the following statements are true EXCEPT:_________.
ale4655 [162]

Answer:

D. the demand for Nike running shoes is less elastic than the demand for shoes.

Explanation:

In this the substitutes would be more for the particular brand rather than the normal running shoes. Since the demand of running shoes might be less elastic as compared to the demand of nike running shows because the consumer shifted from the nike to other brand that are popular. Plus, the elasticity of demand for running shoes is considered to be inelastic as there is many subsitutes

So, the option d is correct

6 0
3 years ago
Other questions:
  • Ms. Benoit is a self-employed architect who earns $300,000 annual taxable income. For the past several years, her tax rate on th
    8·1 answer
  • . A firm begins the year with a Book Value of $10 million. During the year it generates $5 million in net profits. It paid $1 mi
    7·1 answer
  • A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,250 of supplies on hand. The general ledge
    9·1 answer
  • Dominic heads the corporate communications department of Zookey Technologies. Eva is his least preferred coworker because her pe
    10·1 answer
  • Appalachian Airlines began operating in 2010. The company lost money the first year but has been profitable ever since. The comp
    12·1 answer
  • In China during the 1950s, a group of collective farms, each of which contained more than 30,000 people who lived and worked tog
    9·1 answer
  • Zurasky Corporation is considering two alternatives: A and B. Costs associated with the alternatives are listed below: Alternati
    10·1 answer
  • Teel Distribution Co. has determined its December 31, 2007 inventory on a FIFO basis at $250,000. Information pertaining to that
    15·1 answer
  • Ben started a business on 1 January 2015 using rented premises. At 31 December 2015 Ben owed $1400 for rent. The rent charge to
    15·1 answer
  • The Modified Accelerated Cost Recovery System (MACRS) is a depreciation method which expenses an asset over a single year becaus
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!