Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $130,900.Project 2 requires an initial investment of $97,200. Assume the company requires a 10% rate of return on its investments. (PV of $1, FVof $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)Annual AmountsSales of new productExpensesMaterials, labor, and overhead (except depreciation)Depreciation-MachinerySelling, general, and administrative expensesIncomeYears 1-7Project 1Net present valueYears 1-5Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years for Project 2. (Negative net presentvalues should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearestwhole dollar.)Project 2Present ValueNet Cash Flows x of Annuity at10%Present ValueNet Cash Flows x of Annuity at10%==Project 1$ 105,30070, 20018,7008,640$ 7,760Present Value ofNet Cash Flows$$0Present Value ofNet Cash FlowsProject 2$82,600034,56019,44021,600$ 7,000 THỨmQGvn Toi wo unorriauve projecw invoiving machinery invesŪTOTIES TOROWS. irujoče trequires un inmuur nivesuniemeenProject 2 requires an initial investment of $97,200. Assume the company requires a 10% rate of return on its investments. (PV of $1, FVof $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)Annual AmountsSales of new productExpensesMaterials, labor, and overhead (except depreciation)Depreciation-MachinerySelling, general, and administrative expensesIncomeYears 1-7Project 1Net present valueYears 1-5Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years for Project 2. (Negative net presentvalues should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearestwhole dollar.)Project 2Net present valuePresent ValueNet Cash Flows x of Annuity at10%Present ValueNet Cash Flows x of Annuity at10%==Project 1$ 105,300=70,20018,7008,640$ 7,760Present Value ofNet Cash Flows$0Present Value ofNet Cash Flows$Project 2$ 82,600034,56019,44021,600$ 7,000

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Description: Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $130,900.Project 2 requires an initial investment of $97,200. Assume the company requires a 10% rate of return on its inves

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Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $130,900. Project 2 requires an initial investment of $97,200. Assume the company requires a 10% rate of return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Years 1-7 Project 1 Net present value Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years for Project 2. (Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar.) Project 2 Net Cash Flows X Net Cash Flows x Present Value of Annuity at 10% Present Value of Annuity at 10% = Project 1 $ 105,300 = 70,200 18,700 8,640 $ 7,760 Present Value of Net Cash Flows $ 0 Project 2 $ 82,600 Present Value of Net Cash Flows 34,560 19,440 21,600 $ 7,000

Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $130,900. Project 2 requires an initial investment of $97,200. Assume the company requires a 10% rate of return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Years 1-7 Project 1 Net present value Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years for Project 2. (Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar.) Project 2 Net Cash Flows X Net Cash Flows x Present Value of Annuity at 10% Present Value of Annuity at 10% = Project 1 $ 105,300 = 70,200 18,700 8,640 $ 7,760 Present Value of Net Cash Flows $ 0 Project 2 $ 82,600 Present Value of Net Cash Flows 34,560 19,440 21,600 $ 7,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 4P

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