Question

Phoenix Company can invest in each of three cheese-making
projects: C1, C2, and C3. Each project requires an initial
investment of $270,000 and would yield the following annual cash
flows. (PV of $1, FV of $1, PVA of $1, and FVA of $1) **(Use
appropriate factor(s) from the tables provided.)**

C1 | C2 | C3 | ||||||||||

Year 1 | $ | 26,000 | $ | 110,000 | $ | 194,000 | ||||||

Year 2 | 122,000 | 110,000 | 74,000 | |||||||||

Year 3 | 182,000 | 110,000 | 62,000 | |||||||||

Totals | $ | 330,000 | $ | 330,000 | $ | 330,000 | ||||||

**1.** Assume that the company requires a 10% return
from its investments. Using net present value, determine which
projects, if any, should be acquired.

**2.** Using the answer from part 1, is the internal
rate of return higher or lower than 10% for Project C2?

Answer #1

Most Company has an opportunity to invest in one of two new
projects. Project Y requires a $340,000 investment for new
machinery with a six-year life and no salvage value. Project Z
requires a $340,000 investment for new machinery with a five-year
life and no salvage value. The two projects yield the following
predicted annual results. The company uses straight-line
depreciation, and cash flows occur evenly throughout each year. (PV
of $1, FV of $1, PVA of $1, and FVA...

Most Company has an opportunity to invest in one of two new
projects. Project Y requires a $340,000 investment for new
machinery with a six-year life and no salvage value. Project Z
requires a $340,000 investment for new machinery with a five-year
life and no salvage value. The two projects yield the following
predicted annual results. The company uses straight-line
depreciation, and cash flows occur evenly throughout each year. (PV
of $1, FV of $1, PVA of $1, and FVA...

Most Company has an opportunity to invest in one of two new
projects. Project Y requires a $340,000 investment for new
machinery with a six-year life and no salvage value. Project Z
requires a $340,000 investment for new machinery with a five-year
life and no salvage value. The two projects yield the following
predicted annual results. The company uses straight-line
depreciation, and cash flows occur evenly throughout each year. (PV
of $1, FV of $1, PVA of $1, and FVA...

Most Company has an opportunity to invest in one of two new
projects. Project Y requires a $320,000 investment for new
machinery with a five-year life and no salvage value. Project Z
requires a $320,000 investment for new machinery with a four-year
life and no salvage value. The two projects yield the following
predicted annual results. The company uses straight-line
depreciation, and cash flows occur evenly throughout each year. (PV
of $1, FV of $1, PVA of $1, and FVA...

Most Company has an opportunity to invest in one of two new
projects. Project Y requires a $320,000 investment for new
machinery with a five-year life and no salvage value. Project Z
requires a $320,000 investment for new machinery with a four-year
life and no salvage value. The two projects yield the following
predicted annual results. The company uses straight-line
depreciation, and cash flows occur evenly throughout each year. (PV
of $1, FV of $1, PVA of $1, and FVA...

Following is information on two alternative investments being
considered by Tiger Co. The company requires a 9% return from its
investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use
appropriate factor(s) from the tables provided.) Project X1 Project
X2 Initial investment $ (96,000 ) $ (141,000 ) Expected net cash
flows in: Year 1 33,000 72,000 Year 2 43,500 62,000 Year 3 68,500
52,000 a. Compute each project’s net present value. b. Compute each...

PLEASE fill out chart pasted!!!!!
Most Company has an opportunity to invest in one of two new
projects. Project Y requires a $320,000 investment for new
machinery with a five-year life and no salvage value. Project Z
requires a $320,000 investment for new machinery with a four-year
life and no salvage value. The two projects yield the following
predicted annual results. The company uses straight-line
depreciation, and cash flows occur evenly throughout each year. (PV
of $1, FV of $1,...

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