(TCO 9) Harry Corp buys equipment for $194,000 that will last for 9 years. The...
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(TCO 9) Harry Corp buys equipment for $194,000 that will last for 9 years. The equipment will generate cash flows of $36,000 per year and will have no salvage value at the end of its life. Ignore taxes. Use 10% required rate of return. (a) What is the Present Value (PV) of this investment (at 10%)? (b) What is the NET Present Value (NPV) of this investment Should you buy the equipment if you need 10%? (c) What is the Internal Rate of Return (IRR) of this investment? (d) What is the payback period? (Points : 25)
Question 7. 7. (TCO 10) Tanya Corp sells its products on both credit and cash basis. Monthly sales are sold 20% for cash, 80% for credit. Credit sales are collected 65% in the month of sale and 35% the following month. Sales for the first quarter are BUDGETED as follows: January $200,000; February $300,000; March $300,000. Compute cash collections Budgeted for February. How much cash was collected in the month? (Points : 25)
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