2023 10 2 Net present value Kingston Inc is looking to add a new machine at a cost of 4 133 250 | Assignments Online

2023 10 2 Net present value Kingston Inc is looking to add a new machine at a cost of 4 133 250 | Assignments Online

Assignments Online 2023 Business & Finance

 

10.2  Net present value: Kingston, Inc., is looking to add a new machine at a cost of $4,133,250. The company expects this equipment will lead to cash flows of $814,322, $863,275, $937,250, $1,017,112, $1,212,960, and $1,225,000 over the next six years. If the appropriate discount rate is 15 percent, what is the NPV of this investment?

 

10.7  Payback: Quebec, Inc., is purchasing machinery at a cost of $3,768,966. The company expects, as a result, cash flows of $979,225, $1,158,886, and $1,881,497 over the next three years. What is the payback period?

 

10.28  Draconian Measures, Inc., is evaluating two independent projects. The company uses a 13.8 percent discount rate for such projects. Cost and cash flows are shown in the table. What are the NPVs of the two projects?

 

 

10.32  Jekyll & Hyde Corp. is evaluating two mutually exclusive projects. Their cost of capital is 15 percent. Costs and cash flows are given in the following table. Which project should be accepted?  Calculate NPV and IRR to formulate your decision.

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