**Complete **the following problems in Ch 10:

- P-10-2
- P10-7
- P10-10
- P10-14
- P10-21

**Complete **the following problems in Chapter 11:

- P11-1
- P11-4
- P11-7
- P11-8
- P11-9

**Click **the Assignment Files tab to submit your assignment.

**P10–2**

**Payback comparisons** Nova Products has a 5-year maximum acceptable payback period. The firm is considering the purchase of a new machine and must choose between two alternative ones. The first machine requires an initial investment of $14,000 and generates annual after-tax cash inflows of $3,000 for each of the next 7 years. The second machine requires an initial investment of $21,000 and provides annual cash inflow after taxes of $4,000 for 20 years

**P10-7**

**Net present value: Independent projects** Using a 14% cost of capital, calculate the *net present value* for each of the independent projects shown in the following table, and indicate whether each is acceptable

**P10–10**

**NPV: Mutually exclusive projects** Hook Industries is considering the replacement of one of its old drill presses. Three alternative replacement presses are under consideration. The relevant cash flows associated with each are shown in the following table. The firm’s cost of capital is 15%.

**P10–14**

**Internal rate of return** For each of the projects shown in the following table, calculate the *internal rate of return (IRR)*. Then indicate, for each project, the maximum cost of capital that the firm could have and still find the IRR acceptable

**P10–21**

**All techniques, conflicting rankings** Nicholson Roofing Materials, Inc., is considering two mutually exclusive projects, each with an initial investment of $150,000. The company’s board of directors has set a maximum 4-year payback requirement and has set its cost of capital at 9%. The cash inflows associated with the two projects are shown in the following table

**P11–1**

**Classification of expenditures** Given the following list of outlays, indicate whether each is normally considered a *capital expenditure* or an *operating expenditure*. Explain your answers

**P11–4**

**Sunk costs and opportunity costs**** Masters Golf Products, Inc., spent 3 years and $1,000,000 to develop its new line of club heads to replace a line that is becoming obsolete. To begin manufacturing them, the company will have to invest $1,800,000 in new equipment. The new clubs are expected to generate an increase in operating cash inflows of $750,000 per year for the next 10 years. The company has determined that the existing line could be sold to a competitor for $250,000**

**P11–7**

**Book value** Find the book value for each of the assets shown in the accompanying table, assuming that MACRS depreciation is being used. See **Table 4.2** on **page 120** for the applicable depreciation percentages

**P11–8**

**Book value and taxes on sale of assets** Troy Industries purchased a new machine 3 years ago for $80,000. It is being depreciated under MACRS with a 5-year recovery period using the percentages given in **Table 4.2** on page 000. Assume a 40% tax rate.

**P11–9**

**Tax calculations** For each of the following cases, determine the total taxes resulting from the transaction. Assume a 40% tax rate. The asset was purchased 2 years ago for $200,000 and is being depreciated under MACRS using a 5-year recovery period. (See **Table 4.2** on **page 120**for the applicable depreciation percentages.)

**Complete **the following problems in Ch 10:

- P-10-2
- P10-7
- P10-10
- P10-14
- P10-21

**Complete **the following problems in Chapter 11:

- P11-1
- P11-4
- P11-7
- P11-8
- P11-9

**Click **the Assignment Files tab to submit your assignment.

**P10–2**

**Payback comparisons** Nova Products has a 5-year maximum acceptable payback period. The firm is considering the purchase of a new machine and must choose between two alternative ones. The first machine requires an initial investment of $14,000 and generates annual after-tax cash inflows of $3,000 for each of the next 7 years. The second machine requires an initial investment of $21,000 and provides annual cash inflow after taxes of $4,000 for 20 years

**P10-7**

**Net present value: Independent projects** Using a 14% cost of capital, calculate the *net present value* for each of the independent projects shown in the following table, and indicate whether each is acceptable

**P10–10**

**NPV: Mutually exclusive projects** Hook Industries is considering the replacement of one of its old drill presses. Three alternative replacement presses are under consideration. The relevant cash flows associated with each are shown in the following table. The firm’s cost of capital is 15%.

**P10–14**

**Internal rate of return** For each of the projects shown in the following table, calculate the *internal rate of return (IRR)*. Then indicate, for each project, the maximum cost of capital that the firm could have and still find the IRR acceptable

**P10–21**

**All techniques, conflicting rankings** Nicholson Roofing Materials, Inc., is considering two mutually exclusive projects, each with an initial investment of $150,000. The company’s board of directors has set a maximum 4-year payback requirement and has set its cost of capital at 9%. The cash inflows associated with the two projects are shown in the following table

**P11–1**

**Classification of expenditures** Given the following list of outlays, indicate whether each is normally considered a *capital expenditure* or an *operating expenditure*. Explain your answers

**P11–4**

**Sunk costs and opportunity costs**** Masters Golf Products, Inc., spent 3 years and $1,000,000 to develop its new line of club heads to replace a line that is becoming obsolete. To begin manufacturing them, the company will have to invest $1,800,000 in new equipment. The new clubs are expected to generate an increase in operating cash inflows of $750,000 per year for the next 10 years. The company has determined that the existing line could be sold to a competitor for $250,000**

**P11–7**

**Book value** Find the book value for each of the assets shown in the accompanying table, assuming that MACRS depreciation is being used. See **Table 4.2** on **page 120** for the applicable depreciation percentages

**P11–8**

**Book value and taxes on sale of assets** Troy Industries purchased a new machine 3 years ago for $80,000. It is being depreciated under MACRS with a 5-year recovery period using the percentages given in **Table 4.2** on page 000. Assume a 40% tax rate.

**P11–9**

**Tax calculations** For each of the following cases, determine the total taxes resulting from the transaction. Assume a 40% tax rate. The asset was purchased 2 years ago for $200,000 and is being depreciated under MACRS using a 5-year recovery period. (See **Table 4.2** on **page 120**for the applicable depreciation percentages.)

**Complete **the following problems in Ch 10:

- P-10-2
- P10-7
- P10-10
- P10-14
- P10-21

**Complete **the following problems in Chapter 11:

- P11-1
- P11-4
- P11-7
- P11-8
- P11-9

**Click **the Assignment Files tab to submit your assignment.

**P10–2**

**Payback comparisons** Nova Products has a 5-year maximum acceptable payback period. The firm is considering the purchase of a new machine and must choose between two alternative ones. The first machine requires an initial investment of $14,000 and generates annual after-tax cash inflows of $3,000 for each of the next 7 years. The second machine requires an initial investment of $21,000 and provides annual cash inflow after taxes of $4,000 for 20 years

**P10-7**

**Net present value: Independent projects** Using a 14% cost of capital, calculate the *net present value* for each of the independent projects shown in the following table, and indicate whether each is acceptable

**P10–10**

**NPV: Mutually exclusive projects** Hook Industries is considering the replacement of one of its old drill presses. Three alternative replacement presses are under consideration. The relevant cash flows associated with each are shown in the following table. The firm’s cost of capital is 15%.

**P10–14**

**Internal rate of return** For each of the projects shown in the following table, calculate the *internal rate of return (IRR)*. Then indicate, for each project, the maximum cost of capital that the firm could have and still find the IRR acceptable

**P10–21**

**All techniques, conflicting rankings** Nicholson Roofing Materials, Inc., is considering two mutually exclusive projects, each with an initial investment of $150,000. The company’s board of directors has set a maximum 4-year payback requirement and has set its cost of capital at 9%. The cash inflows associated with the two projects are shown in the following table

**P11–1**

**Classification of expenditures** Given the following list of outlays, indicate whether each is normally considered a *capital expenditure* or an *operating expenditure*. Explain your answers

**P11–4**

**Sunk costs and opportunity costs**** Masters Golf Products, Inc., spent 3 years and $1,000,000 to develop its new line of club heads to replace a line that is becoming obsolete. To begin manufacturing them, the company will have to invest $1,800,000 in new equipment. The new clubs are expected to generate an increase in operating cash inflows of $750,000 per year for the next 10 years. The company has determined that the existing line could be sold to a competitor for $250,000**

**P11–7**

**Book value** Find the book value for each of the assets shown in the accompanying table, assuming that MACRS depreciation is being used. See **Table 4.2** on **page 120** for the applicable depreciation percentages

**P11–8**

**Book value and taxes on sale of assets** Troy Industries purchased a new machine 3 years ago for $80,000. It is being depreciated under MACRS with a 5-year recovery period using the percentages given in **Table 4.2** on page 000. Assume a 40% tax rate.

**P11–9**

**Tax calculations** For each of the following cases, determine the total taxes resulting from the transaction. Assume a 40% tax rate. The asset was purchased 2 years ago for $200,000 and is being depreciated under MACRS using a 5-year recovery period. (See **Table 4.2** on **page 120**for the applicable depreciation percentages.)

**Complete **the following problems in Ch 10:

**Complete **the following problems in Ch 10:**Complete **

- P-10-2
- P10-7
- P10-10
- P10-14
- P10-21

P-10-2

P10-7

P10-10

P10-14

P10-21

**Complete **the following problems in Chapter 11:

**Complete **the following problems in Chapter 11:**Complete **

- P11-1
- P11-4
- P11-7
- P11-8
- P11-9

P11-1

P11-4

P11-7

P11-8

P11-9

**Click **the Assignment Files tab to submit your assignment.

**Click **the Assignment Files tab to submit your assignment.**Click **

**P10–2**

**P10–2****P10–2**P10–2

**Payback comparisons** Nova Products has a 5-year maximum acceptable payback period. The firm is considering the purchase of a new machine and must choose between two alternative ones. The first machine requires an initial investment of $14,000 and generates annual after-tax cash inflows of $3,000 for each of the next 7 years. The second machine requires an initial investment of $21,000 and provides annual cash inflow after taxes of $4,000 for 20 years

**Payback comparisons** Nova Products has a 5-year maximum acceptable payback period. The firm is considering the purchase of a new machine and must choose between two alternative ones. The first machine requires an initial investment of $14,000 and generates annual after-tax cash inflows of $3,000 for each of the next 7 years. The second machine requires an initial investment of $21,000 and provides annual cash inflow after taxes of $4,000 for 20 years**Payback comparisons**Payback comparisons Nova Products has a 5-year maximum acceptable payback period. The firm is considering the purchase of a new machine and must choose between two alternative ones. The first machine requires an initial investment of $14,000 and generates annual after-tax cash inflows of $3,000 for each of the next 7 years. The second machine requires an initial investment of $21,000 and provides annual cash inflow after taxes of $4,000 for 20 years

**P10-7**

**P10-7****P10-7**P10-7

**Net present value: Independent projects** Using a 14% cost of capital, calculate the *net present value* for each of the independent projects shown in the following table, and indicate whether each is acceptable

**Net present value: Independent projects** Using a 14% cost of capital, calculate the *net present value* for each of the independent projects shown in the following table, and indicate whether each is acceptable**Net present value: Independent projects**Net present value: Independent projects Using a 14% cost of capital, calculate the *net present value* for each of the independent projects shown in the following table, and indicate whether each is acceptable*net present value*

**P10–10**

**P10–10****P10–10**P10–10

**NPV: Mutually exclusive projects** Hook Industries is considering the replacement of one of its old drill presses. Three alternative replacement presses are under consideration. The relevant cash flows associated with each are shown in the following table. The firm’s cost of capital is 15%.

**NPV: Mutually exclusive projects** Hook Industries is considering the replacement of one of its old drill presses. Three alternative replacement presses are under consideration. The relevant cash flows associated with each are shown in the following table. The firm’s cost of capital is 15%.**NPV: Mutually exclusive projects**NPV: Mutually exclusive projects Hook Industries is considering the replacement of one of its old drill presses. Three alternative replacement presses are under consideration. The relevant cash flows associated with each are shown in the following table. The firm’s cost of capital is 15%.

**P10–14**

**P10–14****P10–14**P10–14

**Internal rate of return** For each of the projects shown in the following table, calculate the *internal rate of return (IRR)*. Then indicate, for each project, the maximum cost of capital that the firm could have and still find the IRR acceptable

**Internal rate of return** For each of the projects shown in the following table, calculate the *internal rate of return (IRR)*. Then indicate, for each project, the maximum cost of capital that the firm could have and still find the IRR acceptable**Internal rate of return**Internal rate of return For each of the projects shown in the following table, calculate the *internal rate of return (IRR)*. Then indicate, for each project, the maximum cost of capital that the firm could have and still find the IRR acceptable*internal rate of return (IRR)*

**P10–21**

**P10–21****P10–21**P10–21

**All techniques, conflicting rankings** Nicholson Roofing Materials, Inc., is considering two mutually exclusive projects, each with an initial investment of $150,000. The company’s board of directors has set a maximum 4-year payback requirement and has set its cost of capital at 9%. The cash inflows associated with the two projects are shown in the following table

**All techniques, conflicting rankings** Nicholson Roofing Materials, Inc., is considering two mutually exclusive projects, each with an initial investment of $150,000. The company’s board of directors has set a maximum 4-year payback requirement and has set its cost of capital at 9%. The cash inflows associated with the two projects are shown in the following table**All techniques, conflicting rankings**All techniques, conflicting rankings Nicholson Roofing Materials, Inc., is considering two mutually exclusive projects, each with an initial investment of $150,000. The company’s board of directors has set a maximum 4-year payback requirement and has set its cost of capital at 9%. The cash inflows associated with the two projects are shown in the following table

**P11–1**

**P11–1****P11–1**P11–1

**Classification of expenditures** Given the following list of outlays, indicate whether each is normally considered a *capital expenditure* or an *operating expenditure*. Explain your answers

**Classification of expenditures** Given the following list of outlays, indicate whether each is normally considered a *capital expenditure* or an *operating expenditure*. Explain your answers**Classification of expenditures**Classification of expenditures Given the following list of outlays, indicate whether each is normally considered a *capital expenditure* or an *operating expenditure*. Explain your answers*capital expenditure**operating expenditure*

**P11–4**

**P11–4****P11–4**P11–4

**Sunk costs and opportunity costs**

**Sunk costs and opportunity costs****Sunk costs and opportunity costs**Sunk costs and opportunity costs

**P11–7**

**P11–7****P11–7**P11–7

**Book value** Find the book value for each of the assets shown in the accompanying table, assuming that MACRS depreciation is being used. See **Table 4.2** on **page 120** for the applicable depreciation percentages

**Book value** Find the book value for each of the assets shown in the accompanying table, assuming that MACRS depreciation is being used. See **Table 4.2** on **page 120** for the applicable depreciation percentages**Book value** Find the book value for each of the assets shown in the accompanying table, assuming that MACRS depreciation is being used. See **Table 4.2** on **page 120** for the applicable depreciation percentages**Book value**Book value Find the book value for each of the assets shown in the accompanying table, assuming that MACRS depreciation is being used. See **Table 4.2****Table 4.2****Table 4.2** on **page 120****page 120****page 120** for the applicable depreciation percentages

**P11–8**

**P11–8****P11–8**P11–8

**Book value and taxes on sale of assets** Troy Industries purchased a new machine 3 years ago for $80,000. It is being depreciated under MACRS with a 5-year recovery period using the percentages given in **Table 4.2** on page 000. Assume a 40% tax rate.

**Book value and taxes on sale of assets** Troy Industries purchased a new machine 3 years ago for $80,000. It is being depreciated under MACRS with a 5-year recovery period using the percentages given in **Table 4.2** on page 000. Assume a 40% tax rate.**Book value and taxes on sale of assets**Book value and taxes on sale of assets Troy Industries purchased a new machine 3 years ago for $80,000. It is being depreciated under MACRS with a 5-year recovery period using the percentages given in **Table 4.2****Table 4.2** on page 000. Assume a 40% tax rate.

**P11–9**

**P11–9****P11–9**P11–9

**Tax calculations** For each of the following cases, determine the total taxes resulting from the transaction. Assume a 40% tax rate. The asset was purchased 2 years ago for $200,000 and is being depreciated under MACRS using a 5-year recovery period. (See **Table 4.2** on **page 120**for the applicable depreciation percentages.)

**Tax calculations** For each of the following cases, determine the total taxes resulting from the transaction. Assume a 40% tax rate. The asset was purchased 2 years ago for $200,000 and is being depreciated under MACRS using a 5-year recovery period. (See **Table 4.2** on **page 120**for the applicable depreciation percentages.)**Tax calculations**Tax calculations For each of the following cases, determine the total taxes resulting from the transaction. Assume a 40% tax rate. The asset was purchased 2 years ago for $200,000 and is being depreciated under MACRS using a 5-year recovery period. (See **Table 4.2****Table 4.2****Table 4.2** on **page 120****page 120****page 120**for the applicable depreciation percentages.)