Question Details

[answered] 1) A new computer system will require an initial outlay of


Hi. It is a problem set of finance.

...............


1) A new computer system will require an initial outlay of $20,000, but it will increase the firm?s

 

cash flows by $4,000 a year for each of the next 8 years. Is the system worth installing if the

 

required return is 9%? What if it is 14%? How high can the discount rate be before you would

 

reject the project?

 

2) First, calculate the payback period and NPV for all projects below. For all the projects, the

 

relevant discount rate is 10%. Then, comment on why the payback period provides misleading

 

information about the following:

 

a. Project A

 

b. Project B versus Project C

 

c. Project D versus Project E

 

d. Project D versus Project F

 

Year A B C D E F 0 - -1,000 -1,000 - -1,000 -1,000 1 1,000 100 400 500 400 500 2 200 300 500 400 500 3 300 200 500 400 10,000 4 400 100 400 5 500 500 400 3) You can purchase an optical scanner today for $400. The scanner provides benefits worth $60

 

a year. The expected life of the scanner is 10 years. Scanners are expected to decrease in price by

 

20% per year. Suppose the discount rate is 10%. Should you purchase the scanner today or wait

 

to purchase? What is the best purchase time?

 

4) You are operating an old machine that will last 2 more years before it dies. It costs $14,000

 

per year to operate. You can replace it with a new machine that costs $25,000 but is much more

 

efficient with $8,000 per year in operating costs and will last 5 years. Should you replace now or

 

wait? The opportunity cost of capital is 6.5%.

 


Solution details:
STATUS
Answered
QUALITY
Approved
ANSWER RATING

This question was answered on: Sep 18, 2020

PRICE: $15

Solution~0001001019.zip (25.37 KB)

Buy this answer for only: $15

This attachment is locked

We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free copy from our tutoring website www.aceyourhomework.com (Deadline assured. Flexible pricing. TurnItIn Report provided)

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
SiteLock

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Sep 18, 2020

EXPERT

Tutor

ANSWER RATING

GET INSTANT HELP/h4>

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

NEW ASSIGNMENT HELP?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN YOUR SET DEADLINE.

Order Now