Maple Thread Inc. has gathered the following data on a proposed investment project (Ignore income taxes.): Investment in depreciable equipment $ 640,000   Annual net cash flows  $ 86,000   Life of the equipment 20 years Salvage value $ 0   Discount rate 9%   Maple uses straight-line depreciation on all equipment. Assume that cash flows occur uniformly throughout each year, except for the initial investment. The payback period for the investment is closest to:

Ridge Outfitters is considering a project that would require an investment of $334,000 and would last for 8 years. The incremental annual revenues and expenses generated by the project during those 8 years would be as follows (Ignore income taxes.): Sales $ 230,000 Variable expenses 18,000 Contribution margin 212,000 Fixed expenses:   Salaries 36,000 Rents 49,000 Depreciation 44,000 Total fixed expenses 129,000 Net operating income $ 83,000 The scrap value of the project’s assets at the end of the project would be $26,000. The cash inflows occur evenly throughout the year. The project’s payback period is closest to:

Which of the following statements is true? An increase in the expected salvage value at the end of a capital budgeting project will increase the internal rate of return for that project. The minimum required rate of return is the discount rate that makes the net present value of the project equal to zero.

Nest and Co. is considering the acquisition of a new machine that costs $355,000 and has a useful life of 5 years with no salvage value. The incremental net operating income and incremental net cash flows that the machine would produce are (Ignore income taxes.):   Incremental Net Operating Income Incremental Net Cash Flows Year 1 $ 62,000 $ 148,000 Year 2 $ 68,000 $ 154,000 Year 3 $ 79,000 $ 165,000 Year 4 $ 42,000 $ 128,000 Year 5 $ 84,000 $ 170,000 Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period of this investment is closest to:

Terra Goods has provided the following data concerning an investment project that it is considering: Initial investment $ 280,000   Annual cash flow  $ 128,000 per year Expected life of the project 4 years Discount rate 9%   Note: You will need the PV tables for this question. The net present value of the project is closest to:

Lunar Tech’s management is investigating the purchase of a small used drone to use in conducting visual inspections of its outdoor industrial facilities. The drone would have a useful life of 5 years. Lunar Tech uses a discount rate of 10% in its capital budgeting. The net present value of the investment, excluding intangible benefits, is- $395,300. (Ignore income taxes.) How large would the annual intangible benefit have to be to make the investment in the drone financially attractive? Note: You will need the PV tables for this question.

Nest and Co. is considering the acquisition of a new machine that costs $355,000 and has a useful life of 5 years with no salvage value. The incremental net operating income and incremental net cash flows that the machine would produce are (Ignore income taxes.):   Incremental Net Operating Income Incremental Net Cash Flows Year 1 $ 62,000 $ 148,000 Year 2 $ 68,000 $ 154,000 Year 3 $ 79,000 $ 165,000 Year 4 $ 42,000 $ 128,000 Year 5 $ 84,000 $ 170,000 Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period of this investment is closest to:

North Pine Partners is considering the purchase of a machine that would cost $240,000 and would last for 10 years. At the end of 10 years, the machine would have a salvage value of $21,500. By reducing labor and other operating costs, the machine would provide annual cost savings of $37,000. The company requires a minimum pretax return of 10% on all investment projects. (Ignore income taxes.) Please use PV tables to complete this problem. The net present value of the proposed project is closest to: Note: please format your response rounded to the nearest whole dollar and please place dollar signs inside parentheses; i.e., $0,000 or ($0,000)

Crystal Tech has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment $ 32,000   Annual cash inflows  $ 6,800   Salvage value of equipment $ 0   Life of the investment 15 years Required rate of return 10%   Crystal uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. Note: You will need the PV tables for this question. The internal rate of return of the investment is closest to: 

Ridge Outfitters is considering a project that would require an investment of $334,000 and would last for 8 years. The incremental annual revenues and expenses generated by the project during those 8 years would be as follows (Ignore income taxes.): Sales $ 230,000 Variable expenses 18,000 Contribution margin 212,000 Fixed expenses:   Salaries 36,000 Rents 49,000 Depreciation 44,000 Total fixed expenses 129,000 Net operating income $ 83,000 The scrap value of the project’s assets at the end of the project would be $26,000. The cash inflows occur evenly throughout the year. The project’s payback period is closest to: