Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines. The outlay required is $598,122. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow:
| Year | Cash Revenues | Cash Expenses |
| 1 | $1,500,000 | $1,300,000 |
| 2 | 1,500,000 | 1,300,000 |
| 3 | 1,500,000 | 1,300,000 |
| 4 | 1,500,000 | 1,300,000 |
| 5 | 1,500,000 | 1,300,000 |
Required:
Compute the Investment’s Internal Rate of return. Enter as a percent. If required, round your answer to the nearest whole percent.
IRR = fill in the blank, %
Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return
Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines. The outlay required is $800,000. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow:
| Year | Cash Revenues | Cash Expenses |
| 1 | $1,300,000 | $1,100,000 |
| 2 | 1,300,000 | 1,100,000 |
| 3 | 1,300,000 | 1,100,000 |
| 4 | 1,300,000 | 1,100,000 |
| 5 | 1,300,000 | 1,100,000 |
Required:
Compute the payback period for the NC equipment. Round your answer to one decimal place.
Payback period = fill in the blank, years
Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return
Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines. The outlay required is $700,000. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow:
| Year | Cash Revenues | Cash Expenses |
| 1 | $1,300,000 | $1,100,000 |
| 2 | 1,300,000 | 1,100,000 |
| 3 | 1,300,000 | 1,100,000 |
| 4 | 1,300,000 | 1,100,000 |
| 5 | 1,300,000 | 1,100,000 |
Required:
Compute the investment’s Net Present Value, assuming a required rate of return of 10 percent. Round present value calculations and your final answer to the nearest dollar.
NPV = $fill in the blank 1
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