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  • Activity 2.2.2 Answer

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    Chrismae Monteverde Santos
    12 views5 pages
    The document contains information about the net cost, annual cash inflows, discounted payback period, net present value, profitability index, and internal rate of return for a new machine and new equipment. For the new machine, the net cost is 966,000, the annual after-tax cash inflows are 281,600, the discounted payback period is 4.42 years, the net present value is 101,486, the profitability index is 1.105, and the internal rate of return is 14.03%. For the new equipment, the net cost is 1,559,000, the annual after-tax cash inflows are 355,000, the net present value is (89,086.43

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    The document contains information about the net cost, annual cash inflows, discounted payback period, net present value, profitability index, and internal rate of return for a new machine and new equipment. For the new machine, the net cost is 966,000, the annual after-tax cash inflows are 281,600, the discounted payback period is 4.42 years, the net present value is 101,486, the profitability index is 1.105, and the internal rate of return is 14.03%. For the new equipment, the net cost is 1,559,000, the annual after-tax cash inflows are 355,000, the net present value is (89,086.43

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    12 views5 pages

    Activity 2.2.2 Answer

    Uploaded by

    Chrismae Monteverde Santos
    The document contains information about the net cost, annual cash inflows, discounted payback period, net present value, profitability index, and internal rate of return for a new machine and new equipment. For the new machine, the net cost is 966,000, the annual after-tax cash inflows are 281,600, the discounted payback period is 4.42 years, the net present value is 101,486, the profitability index is 1.105, and the internal rate of return is 14.03%. For the new equipment, the net cost is 1,559,000, the annual after-tax cash inflows are 355,000, the net present value is (89,086.43

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 5

    Name : Chrismae M.

    Santos BSMA-3

    1.
    a. Net cost of investment in the new machine?
    Answer : 966 000
    Solution :

    b. Annual after-tax net cash inflows from operating the new machine
    Answer :281 600
    Solution:

    c. Discounted payback period of the new machine


    Answer: 4.42 years
    Solution :
    d. Net present value of the new machine
    Answer : 101 486
    Solution :

    e. Profitability Index of the new machine


    Answer: 1.105 or 1.11
    Solution :

    f. Internal rate of return of the new machine


    Answer: 14.03 %
    Solution :

    2.
    a. Net cost of investment in the new equipment.
    Answer: 1 559 000
    Solution :

    b. Annual net cash inflows net of income taxes of the new equipment.
    Answer: 355 000
    Solution :

    c. Net present value of the new equipment


    Answer : (89 086.43)
    Solution:

    d. Profitability index of the new equipment


    Answer : 0.86
    Solution :

    e. Internal rate of return of the new equipment


    Answer: 4.50%
    Solution:

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