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Devry ACCT346 Week 7 Assignment

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Question;DeVry University;ACCT346 Weekly Assignment;Week 7;Directions: Your assignment this week is to answer the four questions;below. Please note that Question #1 has 2 parts, Part A and Part B. Please;show your work for full credit and use the box provided. Please add more;rows or columns to the box if needed.;1. Gomez;Corporation is considering two alternative investment proposals with the;following data;Proposal;X;Proposal;Y;Investment;$8,50,000;$4,68,000;Useful life;8;years;8;years;Estimated annual net;$1,25,000;$78,000;cash inflows for 8 years;Residual value;$40,000;$;-;Depreciation method;Straight-line;Straight-line;Required rate of return;14%;10%;1a. How long is the payback period for Proposal X?;1b. What is the accounting rate of return for Proposal Y?;2. You have been;awarded a scholarship that will pay you $500 per semester at the end of each of;the next 8 semesters that you earn a GPA of 3.5 or better. You are a very;serious student and you anticipate receiving the scholarship every semester.;Using a discount rate of 3% per semester, which of the following is the correct;calculation for determining the present value of the scholarship? PLEASE STATE;WHY YOU CHOSE THE ANSWER THAT YOU DID.;A) PV =;$500 ? 3% ? 8;B) PV =;$500 ? (Annuity PV factor, i = 3%, n = 8);C) PV =;$500 ? (Annuity FV factor, i = 6%, n = 4);D) PV =;$1,000 ? (PV factor, i = 3%, n = 4);3. Maersk Metal;Stamping is analyzing a special investment project. The project will require;the purchase of two machines for $30,000 and $8,000 (both machines are;required). The total residual value at the end of the project is $1,500. The;project will generate cash inflows of $11,000 per year over its 8-year life.;If Maersk requires a;6% return, what is the net present value (NPV) of this project? (Use present;value tables or Excel.);4. Hincapie;Manufacturing is evaluating investing in a new metal stamping machine costing;$30,924. Hincapie estimates that it will realize $12,000 in annual cash inflows;for each year of the machine's 3-year useful life.;Approximately, what is the the internal rate of return (IRR);for the machine? (Use present value tables or Excel.)

 

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