(A) A company is considering a major expansion of its product line. The initial outlay...
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(A) A company is considering a major expansion of its product line. The initial outlay would be $10,100,000 and the project would generate cash flows of $1,290,000 per year for 20 years. The appropriate discount rate is 10%. (a) calculate the NPV (b) calculate the PI (c) calculate the IRR (d) should this project be excepted?
(B) The same company is considering a new system for its lot. The system will provide annual labor savings and reduced waste totaling $175,000 with the initial investment of only $485,000. The appropriated discount rate for this type of project is 11% what is the project is kind of payback period.
(C) The company is considering a project with an initial cash outlay of $77,000 and expected cash flows of $21,560 at the end of each year for 6 years. The discount rate for this project is 9.5%. (a) what are their projects payback and discounted payback periods? (b) what is the projects NPV? (c) what is the projects PI? (d) what is the projects IRR?
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