Cengage ?cengageNOW! Online t?t e Chegg Study I Guided S- X assignment-take Othe

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Cengage ?cengageNOW! Online t?t e Chegg Study I Guided S- X assignment-take Other tookmarks Check My Work 2. 4. Exercise 19.10 Basic Conccpts Ruber s Cumpany is uuris eriny ?n inves rien iri euuipmen hel is Lapable u producing rriur icien Y Lhan lhe curren years and will have no salvage value. The expected cash flows associated with the project are as follows: echnu uyy. Th?uuuey require. S 2 293 200. The equi prriert is expects w as five Cash Revenues Cash Expenses wa $2,981,160 2,981,160 2,981,160 2,981,160 2,981,160 $2,293,200 2,293,200 2.293,200 2,293,200 2,293,200 The present value tables proviued in Exhibit 19B.1 and Exhibit 19B.2 must be used to sve the elowing protlerris 1. Compute the project's payback period. If required, round your answer to two decimal places. 3.33 ycors Compute the project's accouniting rate ol return. Enter your ariswer as a whole percentage velue (lor exarrmple, 16% should b ered as 16" in the answer bax). 3. Computerhe project's net present value, ?55i iming ? required rte of rrtum nf 10 percent. When required, round your answer to the nMmst dollar. 900771 4. Compute le projects internal tste ul return. Enter your ar?swers as wt oe percentage values lor example 16% should be entered ds Betweern 6 in the answer box). 13 16 Hide Feedback 10:10 AM Partially Correct 1. The payback period is the time required for a firm to recover its original investment. 2. Remember youll have to average income by year.

Explanation / Answer

Answer 3.

Initial Cash Outlay = $2,293,200

Annual Cash Flow = Annual Cash Revenue - Annual Cash Expenses
Annual Cash Flow = $2,981,160 - $2,293,200
Annual Cash Flow = $687,960

NPV = -$2,293,200 + $687,960 * PVA of $1 (10%, 5)
NPV = -$2,293,200 + $687,960 * 3.791
NPV = $314,856

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