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Rate of Return Follow the format shown in Exhibit 128.1 and Exhibit 12B.2 as you complete the requirements below Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows. a. Cuenca Company is considering the purchase of new equipment that will speed up the process for producing flash drives. The equipment will ost $7,200,000 and have a ife of s years with no expected salvage value. The expected cash flows associated with the project follow Year Cash Revenues 6,000,000 6,000,000 6,000,000 6,000,000 $8,000,000 8,000,000 8,000,000 8,000,000 b. Kathy Shorts is evalusting an investment in an information system that will save $240,00 per year. She estimates that the system will last 10 years. The system will cost $1,248,000. Her company's cost of capital s 10%. that a new plant would be buit in Helper, Utah. Elmo told its stockholders that the plant has an expected life of 15 years and an expected IRA c. Elmo Enterprises just to 25%. The cost of building the plant is expected to be $2,880,000 Requireds cent, Calculate the IRR for Cuenca Company. The company's cost of capital is i6%. Round your answer to the nearest 2. Calculate Kathy Short's IRR. Round your answer to the nearest percent. Should she acquire the new system? Yes 3. What should be Elmo Enterprises' expected annual cash flow from the plant? Round your answer to the nearest dollar. t 12B.1 Present Value of a Single Amount 1% 2% 3% 4% 5% 7% 6% 8% 9% 10% 14% 16% 18% 20% 25% 30% 0.99010 0.98039 0.97087 096154 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 0.89286 0.87719 0.86207 0.84746 0.83333 0.80000 0.76923 2 0.98030 0.96117 0.94260 0.92456 0.90703 089000 0.8734 4 085,34 0.84198 082645 0797 19 0 76947 0.74316 0.71818 069444 0.64000 0.59172 0.97059 0.94232 0.91514 0.88900 0.86384 0.83962 0.81630 0.79383 077218 075131 0.71178 0.67497 0.64066 0.60863 0.57870 0.51200 0.45517 0.96098 0.92385 0.88849 0.85480 0.82270 0.7920 0.76290 073503 070843 0.68301 0.63552 0.59208 0.5229 0.S1579 0.48225 0.40960 0.35013 s 0.95147 0.90573 0.86261 0.82193 0.78353 074726 071299 0.68058 0.64993 0.62092 0.56743 0.51937 047611 0.43711 040188 0.32768 0.26933 6 0.94205 0.88797 0.83748 079031 074622 070496 0.66634 0.63017 059627 0.56447 0.50663 0.45559 041044 0.37043 0.33490 0.26214 0.20718 0.93272 0.87056 0.8130 05992 071068 0.66506 0.62275 0.s8349 054703 0.S1316 0.423 039964 0.35383 0.31393 0.27008 0.20972 0.15937 0.92348 oas149 078941 .n060 0.57684 0.62741 0.58201 0.54027 OSO187 046651 040388 0.3sos6 0.30503 0.26604 0.23257 0.16777 0.12259 9 0.91434 o83676 0.76642 0.70259 o6446 0S9190 0.54393 0.0025 0.46043 042410 0.36061 0.30751 0.26295 0.22546 0.19381 0.13422 0.09430 10 0.90529 0.82035 0.74409 0.67556 0.6131ss839 0.50835 0.46319 0.42241 0.3854032197 0.26974 0.22668 0.19106 0.16151 0.10737 0.07254 11 0.89632 0.80426 0.72242 0.64958 0.58468 0.52679 0.47509 0.42888 0.38753 0.35049 0.28748 0.23662 0.19542 0.16192 0.13459 008590 0.os580 12 0.88745 0.78849 0.70138 0.62460 0.55684 0.49697 0.44401 0.39711 0.35553 0.31863 0.25668 0.20756 0.16846 0.13722 011216 0.06872 0.04292 13 0.87866 0.77303 0.68095 0.60057 0.53032 0.46884 0.41496 0.36770 0.32618 0.28966 022917 0.18207 0.14523 0.11629 0.09346 0.05498 0.03302 14 0.86996 0.75788 0.66112 0.57748 0.50507 0.44230 0.38782 0.34046 029925 0.26333 0.20462 0.15971 0.12520 0.09855 0.07789 0.04398 0.02540 15 0.86135 0.74301 0.64186 0.55526 0.48102 0.41727 0.36245 0.31524 0.27454 0.23939 0.18270 0.14010 0.10793 0.08352 0.06491 0.03518 0.01954 16 0.85282 0.72845 0.62317 0.53391 0.45811 0.39365 0.33873 0.29189 0.25187 0.21763 016312 0.12289 0.09304 0.07078 005409 0.02815 0.01503 17 0.84438 0.71416 0.60502 0.51337 0.43630 037136 0.31657 027027 023107 0.19784 0.14564 0.10780 0.08021 005998 0.04507 0.02252 0.01156 18 0.83602 0.70016 0.58739 0.49363 0.41552 0.35034 0.29586 0.25025 0.21199 0.17986 0.13004 0.09456 0.06914 0.05083 0.03756 0.01801 0.00889 19 0.82774 0.68643 0.57029 0.47464 0.39573 0.33051 0.27651 0.23171 0.19449 0.16351 0.11611 0.08295 0139 0.04308 003130 0.01441 0.00684 20 0.81954 0.67297 055368 0.45639 0.37689 0.31180 0.25842 0.21455 0.17843 0.14864 0.10367 0.07276 0.05139 0.03651 0.02608 0.01153 0.00526 21 0.81143 0.65978 0.53755 0.43883 0.35894 0.29416 0.24151 0.19866 0.16370 0.13513 0.09256 0.06383 0.04430 0.03094 0.02174 0.00922 0.00405 22 0.80340 0.64684 0.52189 0.42196 0.34185 0.27751 0.22571 0.18394 0.15018 0.12285 0.08264 0.05599 0.03819 0.02622 0.01811 0.00738 0.00311 23 0.79544 0.63416 0.50669 0.40573 0.32557 0.26180 0.21095 0.17032 0.13778 0.11168 0.07379 0.04911 0.03292 0.02222 0.01509 0.00590 0.00239 24 0.78757 0.62172 0.49193 0.39012 0.31007 0.24698 0.19715 0.15770 0.12640 0.10153 0.06588 0.04308 0.02838 0.01883 0.01258 0.00472 0.00184 25 0.77977 060953 0.47761 0.37512 0.29530 0.23300 0.18425 0.14602 0.11597 0.09230 0.05882 0.03779 0.02447 0.01596 0.01048 0.00378 0.00142 26 0.7720s 0.59758 0.46369 0.36069 0.28124 0.21981 0.17220 0.13520 0.10639 0.08391 0.05252 0.03315 0.02109 0.01352 0.00874 0.00302 0.00109 27 0.76440 0.58586 0.450190.34682 0.26785 020737 0.16093 0.12519 0.09761 0.07628 0.04689 002908 0.01818 0.01146 0.00728 000242 0.00084 28 0.75684 0.57437 0.43708 0.33348 0.25509 0.19563 0.15040 0.11591 0.08955 006934 0.04187 0.02551 0.01567 0.00971 0.00607 0.00193 0.00065 9 0.74934 0.56311 0.42435 0.32065 0.24295 0.18456 0.14056 0.10733 0.08215 0.06304 0.03738 0.02237 0.01351 000823 0.00506 0.00155 0.00os0 30 074192 0.55207 0.41199 0.30832 0.23138 0.17411 0.13137 0.09938 0.07537 0.05731 0.03338 0.01963 0.01165 0.00697 0.00421 0.00124 0.00038 2317 0.53391 0.45811 0.39365 0.33873 029189 0.25187 0.21763 0.16312 0.12289 0.09304 0.028

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