Help with these 2 accounting problems? I\'ve posted these before but every answe

Question

Help with these 2 accounting problems? I've posted these before but every answer I receive is incorrect!

These are the links to the Exhibit 13B-1 and Exhibit 13B-2 mentioned in the problems

Exhibit 13B-1: http://lectures.mhhe.com/connect/0078111005/Exhibit/Exhibit%2013B-1.jpg

Exhibit 13B-2: http://lectures.mhhe.com/connect/0078111005/Exhibit/Exhibit%2013B-2.jpg

Thank you!

Problem 1.)

Link if you can't see it: http://i.imgur.com/sSmfSME.png

Problem 2.)

Link if you can't see it: http://i.imgur.com/GOn27PD.png

Explanation / Answer

Problem 1)

1)

Annual Net cash inflow = Reduction in operating cost + Increase in contributiion Margin

Annual Net cash inflow = (35000-15000) + (4000*0.80)

Annual Net cash inflow = 23200

2)

Net Present Value = -Initial Investment + Annual Cash Inflow *PVA(rate,nper) - Overhaul cost*PV(rate,nper) + Salvage Value *PV(rate,nper)

Net Present Value = -85000 + 23200*PVA(14%,17) - 5000*PV(14%,14) + 3500*PV(14%,17)

Net Present Value = -85000 + 23200*6.373 - 5000*0.160 + 3500*0.108

Net Present Value = $ 62432

Note : Please donot ask multiple question in single question, please ask seperately

Problem 2.)

1)

Net Present Value = -Initial Investment + Annual Cash Inflow *PVA(rate,nper)

Net Present Value = -23000 + 3600*PVA(10%,8)

Net Present Value = -23000 + 3600*5.335

Net Present Value = - 3794

2)

Net Cash Flow = -Initial Investment + Annual Cash Inflow *No of year

Net Cash Flow = -23000+3600*8

Net Cash Flow = $ 5800

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