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Author Question: Sommer Corporation is deciding whether to automate one phase of its production process. The ... (Read 66 times)

audie

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on: Jan 5, 2020
Sommer Corporation is deciding whether to automate one phase of its production process. The equipment has a six-year life and will cost $410,000. Projected net cash inflows from the equipment are as follows:

Year 1$115,000
Year 2$100,000
Year 3$110,000
Year 4$100,000
Year 5$95,000
Year 6$90,000

Sommer Corporation's hurdle rate is 12%. Assume the residual value is zero.


If Sommer Corporation decides to refurbish the equipment at a cost of $50,000 at the end of year 6, it could be used for one more year and would have a $30,000 residual value at the end of year 7. Assume the cash inflow in year 7 is $65,000. The NPV of just the refurbishment is closest to
◦ $41,170.
◦ $4,030.
◦ $17,590.
◦ $15,820.
Managerial Accounting, Canadian Edition ¦ Braun, Tietz, Pyper ¦ 2nd Edition
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Marked as best answer by audie on Jan 5, 2020

amy.lauersdorf90

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Reply #1 on: Jan 5, 2020
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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audie

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Reply 2 on: Jan 5, 2020
Thanks for the timely response, appreciate it

cam1229

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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