Posted: February 20th, 2022

Wk 2 – practice: planning for capital investments | ACC/543 | University of Phoenix

Dwight Donovan, the president of Perez Enterprises, is considering two investment opportunities. Because of limited resources, he will be able to invest in only one of them. Project A is to purchase a machine that will enable factory automation; the machine is expected to have a useful life of four years and no salvage value. Project B supports a training program that will improve the skills of employees operating the current equipment. Initial cash expenditures for Project A are $116,000 and for Project B are $45,000. The annual expected cash inflows are $35,806 for Project A and $14,816 for Project B. Both investments are expected to provide cash flow benefits for the next four years. Perez Enterprises’ desired rate of return is 8 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)

Save Time On Research and Writing
Hire a Pro to Write You a 100% Plagiarism-Free Paper.
Get My Paper

Required

  1. Compute the net present value of each project. Which project should be adopted based on the net present value approach?
  2. Compute the approximate internal rate of return of each project. Which one should be adopted based on the internal rate of return approach? 

CHECK THE ATTACHMENT BELOW:

Expert paper writers are just a few clicks away

Place an order in 3 easy steps. Takes less than 5 mins.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00
Open chat
1
Order through WhatsApp!
professionalsessays.com
Hello!
You Can Now Place your Order through WhatsApp

Order your essay today and save 30% with the discount code 2022DISCOUNT