Transformation project -<br> Please help!!!

The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,020,00

tatyana61 [14]

1. The Year-0 net cash flow is -$1,061,500.

2. The net operating cash flows in Years 1, 2, and 3 are as follows:

Year 1: $288,750 ($386,000 x 1 - 0.25)

Year 2: $288,750 ($386,000 x 1 - 0.25)

Year 3: $288,750 ($386,000 x 1 - 0.25)

3. The additional Year-3 cash flow (i.e, the after-tax salvage and the return of working capital) is $468,750 {($599,000 x 1 - 0.25) + $19,500}.

4. The NPV of the project is ($13,139).

5. The machine should not be purchased because it does not yield a positive NPV.

<h3>What is the net present value?</h3>

The net present value (NPV) shows the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

It is determined by calculating the present values of cash flows using their present value factors as below:

<h3>Data and Calculations:</h3>

Initial cash outlay = $1,061,500 ($1,020,000 + $22,000 + $19,500)

Salvage value = $599,000

Increase in net working capital = $19,500

Annual savings before tax = $386,000

Tax rate = 25%

Annuial savings after tax = $288,750 ($386,000 x 1 - 0.25)

<h3>Determination of Net Present Value (NPV):</h3>

Year Cashflows PV Factor Present Value

0 -$1,061,500 1 -$1,061,500

1 $288,750 0.901 $260,164

2 $288,750 0.812 $234,465

3 $288,750 0.731 $211,076

3 $468,750 0.731 $342,656

Net present value -$13,139

Thus, the project should not be undertaken by The Campbell Company due to the negative NPV that it yields.

Learn more about determining the NPV at brainly.com/question/18848923

#SPJ1

5 0

2 years ago

A scientist invents a car that can travel for many hours without stopping for fuel. The

Lesechka [4]

I believe it should be 1.296 miles

4 0

3 years ago

All the fourth-graders in a certain elementary school took a standardized test. A total of 85% of the students were found to be

Aneli [31]

Answer:

There is a 2% probability that the student is proficient in neither reading nor mathematics.

Step-by-step explanation:

We solve this problem building the Venn's diagram of these probabilities.

I am going to say that:

A is the probability that a student is proficient in reading

B is the probability that a student is proficient in mathematics.

C is the probability that a student is proficient in neither reading nor mathematics.

We have that:

$A = a + (A \cap B)$

In which a is the probability that a student is proficient in reading but not mathematics and $A \cap B$ is the probability that a student is proficient in both reading and mathematics.

By the same logic, we have that:

$B = b + (A \cap B)$

Either a student in proficient in at least one of reading or mathematics, or a student is proficient in neither of those. The sum of the probabilities of these events is decimal 1. So

$(A \cup B) + C = 1$

In which

$(A \cup B) = a + b + (A \cap B)$

65% were found to be proficient in both reading and mathematics.

This means that $A \cap B = 0.65$

78% were found to be proficient in mathematics

This means that $B = 0.78$

$B = b + (A \cap B)$

$0.78 = b + 0.65$

$b = 0.13$

85% of the students were found to be proficient in reading

This means that $A = 0.85$

$A = a + (A \cap B)$

$0.85 = a + 0.65$

$a = 0.20$

Proficient in at least one:

$(A \cup B) = a + b + (A \cap B) = 0.20 + 0.13 + 0.65 = 0.98$

What is the probability that the student is proficient in neither reading nor mathematics?

$(A \cup B) + C = 1$

$C = 1 - (A \cup B) = 1 - 0.98 = 0.02$

There is a 2% probability that the student is proficient in neither reading nor mathematics.

6 0

2 years ago

The table shows the elevations of four cities in the Netherlands which city in the Netherlands is below sea level

Vitek1552 [10]

Answer:

Rotterdam

Step-by-step explanation:

it's in the negatives

3 0

3 years ago

Read 3 more answers

What is the inverse operation of cubed power

aleksley [76]

The inverse operation is a cubed root. It is a square root symbol with a small 3 to the left of the radical. The cubed root of x is a number, when cubed, gives x. For example, $\sqrt[3]{8} =2$ .

6 0

3 years ago

Transformation project - Please help!!!