The profitability index and the internal rate of return:

Nova Cloud’s management is considering investing in aircraft that would have a useful life of 7 years. The company uses a discount rate of 12% in its capital budgeting. The net present value of the investment, excluding the annual cash inflow, is −$405,814. (Ignore income taxes.) How large would the annual cash inflow have to be to make Nova’s investment in the aircraft financially attractive? Note: You will need the PV tables for this question.

Field Supply Co. is investigating automating a process. Old equipment, with a current salvage value of $18,000, would be replaced by a new machine. The new machine would be purchased for $456,000 and would have a 6-year useful life and no salvage value. By automating the process, the company would save $157,000 per year in cash operating costs. The simple rate of return on the investment is closest to (Ignore income taxes.): Note: please round to the nearest tenth (i.e., one decimal place) and format your answer like this: 00.0%

Lunar Tech’s management is investigating the purchase of a small used drone to use in conducting visual inspections of its outdoor industrial facilities. The drone would have a useful life of 5 years. Lunar Tech uses a discount rate of 10% in its capital budgeting. The net present value of the investment, excluding intangible benefits, is- $395,300. (Ignore income taxes.) How large would the annual intangible benefit have to be to make the investment in the drone financially attractive? Note: You will need the PV tables for this question.

Beacon Inc. is considering buying a new machine. This machine will replace an old machine that still has a useful life of 6 years. The new equipment will cost $3,610 per year to operate, compared to the old equipment, which costs $3,825 per year to operate. Additionally, due to increased capacity, an additional 20,100 units can be produced each year. The company makes a contribution margin of $0.10 per unit. The old machine can be sold for $7,100, and the new machine costs $30,100. The incremental annual net cash inflows provided by the new machine would be (Ignore income taxes.):

Echo Data is considering several investment proposals, as shown below:   Investment Proposal   W X Y Z Investment required $ 83,400 $ 103,400 $ 63,400 $ 78,400 Present value of future net cash flows $ 186,200 $ 210,000 $ 163,800 $ 203,900 If the profitability index is used, the ranking of the projects from most to least profitable would be:

Which of the following statements is true? An increase in the expected salvage value at the end of a capital budgeting project will increase the internal rate of return for that project. The minimum required rate of return is the discount rate that makes the net present value of the project equal to zero.

9)     The universal set  is the set of all integers. Select the set corresponding to  .

11) Select the law that establishes that the two sets below are equal.  

10) Select the expression that is equal to the set corresponding to the shaded region in the Venn diagram below: