Relevant cash flow and timeline depiction for each of the following projects determine the relevant cash flows, and depict the cash flows on time line.

1. A project that requires an initial investment of $120,000 and will generate annual operating cash inflows of 25,000 for the next 18 years. In each maintenance of the project will require a 5,000 cash outflow.

Using facts provided: add a terminal value (sold in year 18) for $ 75,000. Required return is 10%.

Calculate the Net Present Value and Internal Rate of Return. Should we accept this project?

2. A new machine with an install cost of $85,000. Sale of the old machine will yield $30,000 in taxes. Operating cash flows generated by the replacement will exceed the operating cash inflows of the old machine by$20,000

In each year of a 6-year period. At the end of year 6, liquidation of the new machine will Yield $20,000 after tax proceeds expected from the old machine had it been retained and liquidated at the end of year 6.

Calculate Net present value and internal rate of return. Should we accept this project? (r=10%)

3. An asset that requires an initial investment of $2,000,000 and will yield annual operating cash outlays will be $20,000 for each year except year 6, when an overhaul requiring an additional cash outlay of $500,000 will be required. The assets liquidation value at the end of year 10 is expected to be zero.

Calculate Net present value and internal rate of return. Should we accept this project? (r=10%)