Sensitivity analysis: San Lucas Corporation
San Lucas Corporation is considering investment in robotic machinery based upon the following estimates:
Cost of robotic machinery $
Residual value $
Useful life years
Net present value $
provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value.
c Determine the minimum annual net cash flow necessary to generate a positive net present value, assuming a desired rate of return of Round to the nearest dollar.
Annual Net Cash Flow
a If the net cash flow is $
b If the net cash flow is $
c If the net cash flow is $
d Both $ and $ net cash flow.
In the above given situation identify the statement that supports San Lucas Corporation's decision of accepting $ and $ net cash flows.
a The net cash inflow is higher and in turn increases the profitability of the business.
b The net present value and the cash flows are positive.
c The net present value can be ignored and the decision is based on the net cash inflow.
d None of the above.
want to make sure everything is correct.
