Sunland Industries is expanding its product line and its production capacity. The costs and expected cash...

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Sunland Industries is expanding its product line and itsproduction capacity. The costs and expected cash flows of the twoindependent projects are given in the following table. The firmuses a discount rate of 16.08 percent for such projects. YearProduct Line Expansion Production Capacity Expansion 0 -$2,053,800-$6,584,800 1 663,900 2,742,200 2 839,000 2,742,200 3 839,0002,742,200 4 839,000 2,612,300 5 839,000 2,612,300 a. What are theNPVs of the two projects? (Enter negative amounts using negativesign, e.g. -45.25. Do not round discount factors. Round otherintermediate calculations and final answer to 0 decimal places,e.g. 1,525.) NPV of product line expansion is $ NPV of productioncapacity expansion is $ b. Should both projects be accepted? oreither? or neither? Explain your reasoning. Sunland should accept.

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Product Line Net present value is solved using a financial calculator The steps to solve on the financial calculator Press the CF button CF0 2053800 It is entered with a negative sign since it is a cash outflow Cash flow for all the years should be entered See Answer

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Sunland Industries is expanding its product line and itsproduction capacity. The costs and expected cash flows of the twoindependent projects are given in the following table. The firmuses a discount rate of 16.08 percent for such projects. YearProduct Line Expansion Production Capacity Expansion 0 -$2,053,800-$6,584,800 1 663,900 2,742,200 2 839,000 2,742,200 3 839,0002,742,200 4 839,000 2,612,300 5 839,000 2,612,300 a. What are theNPVs of the two projects? (Enter negative amounts using negativesign, e.g. -45.25. Do not round discount factors. Round otherintermediate calculations and final answer to 0 decimal places,e.g. 1,525.) NPV of product line expansion is $ NPV of productioncapacity expansion is $ b. Should both projects be accepted? oreither? or neither? Explain your reasoning. Sunland should accept.