I completed all other similar homework questions without any problem, but for so

Question

I completed all other similar homework questions without any problem, but for some reason I cannot figure out the answers to these questions. Thanks for your help in advance!!

(Problems do not include income taxes.)

1. Parks Company is considering an investment proposal in which a working capital investment of $10,000 would be required. The investment would provide cash inflows of $2,000 per year for six years. The working capital would be released for use elsewhere when the project is completed. If the company's discount rate is 10%, the investment's net present value is:
A. $1,290
B. $(1,290)
C. $2,000
D. $4,350

2. The management of Nagata Corporation is investigating buying a small used aircraft to use in making airborne inspections of its above-ground pipelines. The aircraft would have a useful life of 6 years. The company uses a discount rate of 13% in its capital budgeting. The net present value of the investment, excluding the intangible benefits, is -$326,237. To the nearest whole dollar how large would the annual intangible benefit have to be to make the investment in the aircraft financially attractive?
A. $326,237
B. $54,373
C. $81,600
D. $42,411



3. Tighe Corporation is contemplating purchasing equipment that would increase sales revenues by $420,000 per year and cash operating expenses by $231,000 per year. The equipment would cost $747,000 and have a 9 year life with no salvage value. The annual depreciation would be $83,000. The simple rate of return on the investment is closest to:
A. 25.3%
B. 14.2%
C. 11.1%
D. 25.2%

4. The management of Boie Corporation is considering the purchase of a machine that would cost $330,980 and would have a useful life of 6 years. The machine would have no salvage value. The machine would reduce labor and other operating costs by $76,000 per year. The internal rate of return on the investment in the new machine is closest to:
A. 11%
B. 10%
C. 12%
D. 7%

5. Finlay Corporation is investigating automating a process by purchasing a machine for $225,000 that would have a 9 year useful life and no salvage value. By automating the process, the company would save $54,000 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $24,000. The annual depreciation on the new machine would be $25,000. The simple rate of return on the investment is closest to:
A. 24.0%
B. 12.9%
C. 11.1%
D. 14.5%
6.Burwinkel Corporation is considering a project that would require an investment of $252,000 and would last for 7 years. The incremental annual revenues and expenses generated by the project during those 7 years would be as follows:
Sales: $293,000
Variable Exp. 32,000
Contrib. Margin 261,000
Fixed Expenses:
Salaries 32,000
Rents 32,000
Depreciation 32,000
Total F.E’s 96,000
Net Ops Income $165,000

The payback period of the project is closest to:
A. 1.1 years
B. 1.3 years
C. 1.4 years
D. 1.5 years

7. Valdivieso Roofing is considering the purchase of a crane that would cost $137,885, would have a useful life of 9 years, and would have no salvage value. The use of the crane would result in labor savings of $23,000 per year. The internal rate of return on the investment in the crane is closest to:
A. 6%
B. 8%
C. 11%
D. 9%

8. The management of Kissinger Corporation is investigating automating a process. Old equipment, with a current salvage value of $23,000, would be replaced by a new machine. The new machine would be purchased for $330,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $108,000 per year in cash operating costs. The simple rate of return on the investment is closest to:
A. 17.3%
B. 16.7%
C. 16.1%
D. 32.7%

9. Rennin Dairy Corporation is considering a plant expansion decision that has an estimated useful life of 20 years. This project has an internal rate of return of 15% and a payback period of 9.6 years. How would a decrease in the expected salvage value from this project in 20 years affect the following for this project?
Internal R.O.R Decrease Payback Period Decrease
A) Decrease Decrease
B) No Effect Decrease
C) Decrease No Effect
D) Increase No Effect
E) No Effect No Effect
A, B, C, D, or E?

10. Jones and Company has just purchased a new piece of equipment, the cost characteristics of which are given below:
Purchase cost when new: $30,000
Annual Cost Savings: $6,000
Salvage Value $0
Life of Equipment 15 years

The company uses a required rate of return of 10% and depreciates equipment using the straight-line method.

a) The internal rate of return of the investment is closest to:
A. 16%
B. 18%
C. 20%
D. 22%
b) The payback period for the investment is:
A. 5 years
B. 15 years
C. 2 years
D. 7.143 years

Explanation / Answer

1 = B. $(1,290)
2 = C. $81,600
3 = B. 14.2%
4 = B. 10%
5 = B. 12.9%
6 = B. 1.3 years
7 = D. 9%

8 = D. 32.7%

9 = A) Decrease Decrease
10) a = B. 18%       b = A. 5 years

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