A semi-conductor company in California will significantly expand her chemical va

Question

A semi-conductor company in California will significantly expand her chemical vapor deposition units in their various production sites in south-west of the United States. The cash flow for one phase of the project is shown below. Given reinvestment rate of 14% per year for excess funds and 10 % MARR, determine: Year Net cash flow, $1000 +3000 -2000 +1000 -6000 +3800 4 a) b) How many number of ROR values is expected and why? Calculate return on invested capital (ROIC), also known as Composite rate of return, CRR. c) Is the project economically viable?

Explanation / Answer

0.14 1 0.14 0.14 0.909091 0.127273 0.14 0.826446 0.115702 0.14 0.751315 0.105184 0.14 0.683013 0.095622 58%

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