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Elementary,Middle School,High School,College,University,PHD
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
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Wheeler Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines. The outlay required is $800,000. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow:
Â
1 |
$1,300,000 |
$1,000,000 |
2 |
1,300,000 |
1,000,000 |
3 |
1,300,000 |
1,000,000 |
4 |
1,300,000 |
1,000,000 |
5 Â Required |
1,300,000 |
1,000,000 |
1.   Compute the payback period for the NC equipment.
2.   Compute the NC equipment’s accounting rate of return.
3.   Compute the investment’s net present value, assuming a required rate of return of 10 percent.
4.   Compute the investment’s internal rate of return.
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