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How to Get Equipment Finance

There are only 4 questions I need help. Even I have selected correct answers but I need to clarify and steps for each. Please show me how to solve these questions. 1. ) Redwood Inc. Is considering the purchase of new equipment costing $ 220,000. The equipment is amortized straight-line to a zero book value over the life of four years of the project. Projected net income for the four years is $ 7.200, $ 11.300, $ 14.100 and $ 20.000. What is the average distribution rate of return? Answer: 11. 95 percent in February. ) What is the net present value of a project with an initial cost of $ 76,000 and produces cash inflows of $ 22,000 per year for 9 years if the discount rate is 15 percent? Answer: $ 28,974. 85 March. ) You are considering a project with cash flows of $ 852, $ 746, $ 631, $ 528 and $ 402 in the next five years, respectively. The relevant discount rate is 7 percent. What is the net present value of this project if it costs $ 1,700 for the project started? Answer: $ 952. 36 April. ) Holly Inc. Is considering a project that will produce cash inflows of $ 9,000 a year for two consecutive years of $ 6,500 a year for three years. The project cost is $ 25,000. What is the profitability index if the discount rate is 9 percent? Answer: 1. 19 Thanks in advance. Essentially – 1. ) Redwood Inc. Is considering the purchase of new equipment costing $ 220,000. The equipment is amortized straight-line to a zero book value over the life of four years of the project. Projected net income for the four years is $ 7.200, $ 11.300, $ 14.100 and $ 20.000. What is the average distribution rate of return? Answer: 11. 95 percent – Fix tears four total income 52,600 Average income 52600/4 = 13,150 Average investment 220000/2 = 110000 Revenue / Average investment 13150/110000 = 11. 95% 2. ) What is the net present value of a project with an initial cost of $ 76,000 and produces cash inflows of $ 22,000 per year for 9 years if the discount rate is 15 percent? Answer: $ 28,974. 85 Inflow: 22,000 x 4. 772 = 104 984 Outflow (76000) 28984 VAN 3. ) You are considering a project with cash flows of $ 852, $ 746, $ 631, $ 528 and $ 402 in the next five years, respectively. The relevant discount rate is 7 percent. What is the net present value of this project if it costs $ 1,700 for the project started? Answer: $ 952. 36 Calculate PV for each cash flow at a rate of 7% for 1700 and deduct the VAN 4. ) Holly Inc. Is considering a project that will produce cash inflows of $ 9,000 a year for two consecutive years of $ 6,500 a year for three years. The project cost is $ 25,000. What is the profitability index if the discount rate is 9 percent? Answer: 1. 19 9000 Future Value @ 9% = 9000 x 1. Future Value 15832 75911 = 6500 @ 9% = 6,500 x 3. 88965-1. = Total income 75911 13849 – 29861 Outflow – 25000 VAN 4861

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