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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
NorbertoGarcia,general manager of the Argentinean subsidiary of Innovation? Inc., is considering the purchase of new industrial equipment to improve efficiency at its Cordoba plant. The equipment has an estimated useful life of nine years. The estimated cash flows for the equipment are shown in the table that? follows, with no anticipated change in working capital. Innovation has a 16% required rate of return. Assume amortization is calculated on a? straight-line basis. Assume all cash flows occur at? year-end except for initial investment amounts.
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Data Table:
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Initial Investment $185,000
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Annual Cash Flows from operations $50,000
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Cash flow from terminal disposal of equipment $0
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Requirements
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1. |
Calculate? (a) net present? value, (b) payback? period, and? (c) internal rate of return. |
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