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inesscourse.com/platform/mod/quiz/attempt.php?attempt-1812735 E Menu UESTION 1 Not complete Points out of 2000 P Flag question Cost Reduction Proposal: IRR, NPV, and Payback Period PA Chemical currently discharges liquid waste into Pittsburgh's municipal sewer system. However, the Pittsburgh municipal government has informed PA that a surcharge of $5 per thousand cubic liters will son be imposed for the discharge of this waste.This has prompted management to evaluate the desirability of treating its own liquid waste. Finis A proposed system consists of three elements. The first is a retention basin, which would permit unusual discharges to be held and treated before entering the downstream system. The second is a continuous self-cleaning rotary filter required where solids are removed. The third is an automated neutralization process required where materials are added to control the alkalinity-acidity range. The system is designed to process 600.000 liters a day. However, management anticipates that only about 250,000 liters of liquid waste would be processed in a normal workday. The company operates 300 days per year. The initial investment in the system would be $900,000. and annual operating costs are predicted to be $162.000. The system has a predicted useful life of ten years and a salvage value of $70,000 (a) Determine the project's net present value at a discount rate of 16 percent. (Round to the nearest whole number.) $ 0 b) Determine the project's approximate internal rate of return 9% (c) Determine the project's payback period. (Round answer to two decimal places.) 4.23 years Check F8 F9 F10 12 Pt

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Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. Period PV 16% Actual Cash Flow PV of Cash Flow Initial investment 0 1 -900000 -900000 Inflow in the form of saving 600*300*5 1-10 4.833227 900000 4349905 Operating Cost 1-10 4.833227 -162000 -782983 Salvage Value 10 0.226684 70000 15868 Net Present Value 2682790 Period Cash Flow Initial investment -900000 Saving-Operating Cost 738000 Saving-Operating Cost 738000 Saving-Operating Cost 738000 Saving-Operating Cost 738000 Saving-Operating Cost 738000 Saving-Operating Cost 738000 Saving-Operating Cost 738000 Saving-Operating Cost 738000 Saving-Operating Cost 738000 Saving-Operating Cost+Salvage Value 808000 =IRR(C9:C19) IRR 81.81%

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