Cgnore income taxes in this problem.) Monson Company is cossidering fere imvestm
ID: 2589477 • Letter: C
Question
Cgnore income taxes in this problem.) Monson Company is cossidering fere imvestmest opotulities with sh flows as described below Project A: Cash investment now Cash inflow at the end of 5 years. Cash inflow at the end of 8 years. $21.000 $21,000 Project B Cash investment noW $11,000 Annual cash outflow for 5 years Additional cash inflow at the end of 5 year. $21,000 Project C: Cash investment now Annnal cash inflow for 4 years$11,000 Cash outflow at the end of 3 years$5,000 Additional oash inflow at the end of 4 voars.. $15,000 modar Required: project assuming Monson Company uses a 12% discount ompute the net present value of each 13, Uzzle Corporation uses a discount rate of i0% and has a tax rate of 30%. The following cach nows occur in the last year of an 8-year equipment selection investment project: $75,000 Net operating cash inflows. $12,000 Salvage value from sale of equipment.. total after-tax present value of the cash flows above is closest to: A. $26,199 B. $24,518 abo The assumed salvage value was zero when the depreciation deductions were computed for tax purposes. The C:$28,440 D. $12,189Explanation / Answer
12. Calculation of Net Present Value of Moonsoon company useing 12% Discounting rate.
A. Project A
B. Project B
C. Project C
13. Calculation of Net Present Value using 10% Discounting rate.
Particulars Amount Present value of the Cash flow at the end of 5th Year ($ 21,000 * 0.5674 Present value of $1 at the end of 5th year At 12%) (A) $11,916 Present value of the Cash flow at the end of 8th Year ($ 21,000 * 0.4039 Present value of $1 at the end of 7th year At 12%) (B) $8,482 Total Cash Flow (C= A+B) $20,398 cash investment Now (D) $15,000 Net Present Value (E= C-D) $5,398