Your company is Gamboge
You are presented with four independent scenarios below.
Answer the questions posed and show your work to support your answer.
1) Your company is considering an investment in a new facility.
The expected cash flows are presented below:
Year Cash Outflow Cash Inflow
1 1,604,980$ 154,000$
2 0 350,010$
3 50,550$ 453,910$
4 0 353,540$
5 0 506,940$
A) What is the payback period?
Read details on Partial Year Payback ( Show your calculation!!!!)
Note: Show you answer with 2 digits or precision. As an example 3.21 Years
2) A sheet metal company needs a new higher speed metal cutter.
Given below is the necessay financial information to solve the problem.
The initial investment is: 308,090$
Salvage Value is: 20,320$
Incremental Revenue 157,560$
Incremental Expenses 92,260$
B) What is the accounting rate of return (ARR)?
Note: Show your answer with 2 digits of precision. As an example 31.22%
3) Project X-RAY is being considered for an expansion of current capabilities of the company.
Given below is the necessay financial information to solve the problem.
The initial investment is: 12,166$
After Tax net cah inflows 2,079$
Discount Rate 10%
C) What is the net present value (NPV) of the investment?
D) Should the project be considered? Justify your answer.
4) Dalkey Inc. is considering an investment.
The initial Investment is: 86,829$
After Tax net cash inflows: 14,130$
E) What is the internal rate of return (IRR) of the investment?
F) If the required rate of return is 14% should this project be considered? Justify your answer.
G) If the required rate of return is 6% should this project be considered? Justify your answer.