This question's due date has already passed. You may post a tutorial, but there's no guarantee that the original asker will purchase the tutorial. But other people might!

Question

• Closed, but you can still post tutorials
• Due on Jun. 28, 2012
• Asked on Jun 25, 2012 at 3:27:12PM

Rating :No Rating
Tutorials Posted: 0

Q:
Problem 16-18 Using net present value and internal rate of return to evaluate investment opportunities Veronica Tanner, the president of Tanner Enterprises, is considering two investment opportuni- ties. Because of limited resources, she 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 \$100,000 and for Project B are \$40,000. The annual expected cash inflows are \$31,487 for Project A and \$13,169 for Project B. Both investments are expected to provide cash flow benefits for the next four years. Tanner Enterprise’s cost of capital is 8 percent. Required a. Compute the net present value of each project. Which project should be adopted based on the net present value approach? b. Compute the approximate internal rate of return of each project. Which one should be ad- opted based on the internal rate of return approach? c. Compare the net present value approach with the internal rate of return approach. Which method is better in the given circumstances? Why?

Available Tutorials to this Question

\$7.99
• This tutorial hasn't been purchased yet.
• Posted on Jun 25, 2012 at 4:37:41PM
Posted by :

Rating (73):A-
Tutorials Posted: 312,
Earned: \$1,460.12

A:
Preview: ... orrect ...

The full tutorial is about 5 words long plus attachments.

Attachments:

\$5.00
Problem 16-18 Using net present value and internal rate
• This tutorial was purchased 3 times and rated No Rating by students like you.
• Posted on Jun 25, 2012 at 4:39:05PM
Posted by :

Rating (852):A-