Jared's Mat Stand wants to invest in a lathe to make their own...

Question

# Jared's Mat Stand wants to invest in a lathe to make their own...

Jared's Mat Stand wants to invest in a lathe to make their own mats. The cost of the lathe is \$7,500. The net cash flows resulting from the investment are as follows: Year 1: \$2,000; Year 2: \$6,000; Year 3: \$5,000; Year 4: \$700. The company's cost of capital is 16.25%. Compute the NPV of the project.

\$6,200.00

\$13,700.00

(\$2,226.21)

\$2,226.21

Table Bottom wants to purchase a new saw that will make their tables smoother. The cost of the machine is \$367,000. The net cash flows resulting from the investment are as follows: Year 1: \$90,000; Year 2: \$160,000; Year 3: \$300,000; Year 4: \$10,000. The company's cost of capital is 10.50%. Compute the NPV of the project.

(\$74,541.37)

\$560,000.00

\$193,000.00

\$74,541.37

Lewis and Park Travel Tours wants to invest in three new vehicles to use with tourists. The cost of the vehicles is \$35,000. The net cash flows resulting from the investment are as follows: Year 1: \$2,000; Year 2: \$26,000; Year 3: \$19,000. The company's cost of capital is 9.85%. Compute the NPV of the project.

\$47,000.00

\$12,000.00

(\$2,700.53)

\$2,700.53

Swift Stairs Inc is considering investing in a new machine. The cost of the investment is \$200,000. The net cash flows resulting from the investment are as follows: Year 1: \$10,000; Year 2: \$50,000; Year 3: \$110,000; Year 4: \$90,000; Year 5: \$50,000; Year 6: \$200,000. Compute the payback period for this project.

3.33

4.00

6.00

2.50

Llama Lawn-a is considering buying a new high-end lawn mower. The mower will cost \$20,000. The cash flows resulting from the investment are as follows: Year 1: \$12,000; Year 2: \$8,000; Year 3: \$5,000; Year 4: \$1,500; Year 5: \$1,250.  Calculate the IRR of the project.

18.91%

\$1,250.61

23.62%

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