Hello I need help with my wiley plus homework Hiland Inc. manufactures snowsuits

Question

Hello I need help with my wiley plus homework

Hiland Inc. manufactures snowsuits. Hiland is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased five years ago at a price of $1.8 million; six months ago, Hiland spent $55,000 to keep it operational. The existing sewing machine can be sold today for $242,964. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7:

The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value is expected to be $379,100. This new equipment would require maintenance costs of $98,000 at the end of the fifth year. The cost of capital is 9%.Calculate the net present value.

2) Ueker Company is considering three capital expenditure projects. Relevant data for the projects are as follows.

Annual income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. Ueker Company uses the straight-line method of depreciation.Determine the internal rate of return for each project.

Link factor table http://edugen.wileyplus.com/edugen/player/references/index.uni?mode=help&xlinkobject=kimmel9781118128169_hidden-sec-0001&itemid=nopolice

Year 1 $389,900 2 399,900 3 410,800 4 425,200 5 432,200 6 435,200 7 438,000

Explanation / Answer

Cost of new Machine=$2.45 Million Cost of Existing Machine=$1.8Million Operational Cost Spend=$55000 Selling value as on today=$242,964 New Machine Training Cost=$85000 Maintenance cost at the end of 5th year=$98000 Cost of new Machine=$2450000 Training Cost 85000 Disposal of Old 242964 2292036 Cash Flow Year Cash Flow Disconted rate Net Cash Flow 1 389900 0.9174 $357,706 2 399,900 0.8417 $336,588 3 410,800 0.7722 $317,213 4 425,200 0.7084 $301,222 5 432,200 0.6499 $280,900 6 435,200 0.5963 $259,496 7 438,000 0.5470 $239,601 Maintenance Cost 85000*.6499 $55,242 Net Cash Flow from operation $2,037,485 Terminal Salvage 379100*.5470 207367.7 So present Value of Cash Flow $2,244,853 Initial Investment $2,292,036 Net Present Value ($47,183)

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