### 11 book bible bookstore desires to buy a new coding machine to help control book inv 4301172

11) Book & Bible Bookstore desires to buy a new coding machine to help control book inventories. The machine sells for \$36,586 and requires working capital of \$4,000. Its estimated useful life is five years and will have a salvage value of \$4,000. Recovery of working capital will be \$4,000 at the end of its useful life. Annual cash savings from the purchase of the machine will be \$10,000.

Required:

a.Compute the net present value at a 14% required rate of return.

b.Compute the internal rate of return.

c.Determine the payback period of the investment.

12) Sam&#39;s Structures desires to buy a new crane and accessories to help move and install modular buildings. The machine sells for \$75,000 and requires working capital of \$10,000. Its estimated useful life is six years and it will have a salvage value of \$17,560. Recovery of working capital will be \$10,000 at the end of its useful life. Annual cash savings from the purchase of the machine will be \$20,000.

Required:

a.Compute the net present value at a 12% required rate of return.

b.Compute the internal rate of return.

c.Determine the payback period of the investment.

13) Griffith Vehicle has received three proposals for its new vehicle-painting machine. Information on each proposal is as follows:

 Proposal X Proposal Y Proposal Z Initial investment in equipment \$240,000 \$150,000 \$190,000 Working capital needed 0 0 10,000 Annual cash saved by operations: Year 1 80,000 50,000 80,000 Year 2 80,000 42,000 80,000 Year 3 80,000 46,000 80,000 Year 4 80,000 24,000 80,000 Salvage value end of year: Year 1 100,000 80,000 60,000 Year 2 80,000 60,000 50,000 Year 3 40,000 40,000 30,000 Year 4 10,000 20,000 15,000 Working capital returned 0 0 10,000

Required:

Determine each proposal&#39;s payback.

14) Cedile Trailer Supply has received three proposals for its new trailer assembly line. Information on each proposal is as follows:

 Proposal X Proposal Y Proposal Z Initial investment in equipment \$180,000 \$140,000 \$145,000 Working capital needed 0 0 15,000 Annual cash saved by operations: Year 1 60,000 60,000 60,000 Year 2 60,000 50,000 60,000 Year 3 60,000 35,000 60,000 Year 4 60,000 10,000 60,000 Salvage value end of year: Year 1 30,000 25,000 45,000 Year 2 25,000 20,000 40,000 Year 3 20,000 15,000 35,000 Year 4 15,000 10,000 25,000 Working capital returned: 0 0 15,000

Required:

Determine each proposal&#39;s payback.