Please complete the following exercises and/or problems from the

Please complete the following exercises and/or problems from the textbook:







Prepare your answers in an Excel workbook, using one worksheet per exercise or problem.


E26-19 Using payback to make capital investment decisions

Robinson Hardware is adding a new product line that will require an investment

of $1,454,000. Managers estimate that this investment will have a 10-year life and

generate net cash inflows of $300,000 the first year, $270,000 the second year,

and $260,000 each year thereafter for eight years. Compute the payback period.

Note: Exercise S26-19 must be completed before attempting Exercise S26-20.


E26-20 Using ARR to make capital investment decisions

Refer to the Robinson Hardware information in Exercise E26-19. Assume the

project has no residual value. Compute the ARR for the investment. Round to

two places.


E26-21 Using the time value of money

Janice wants to take the next five years off work to travel around the world. She

estimates her annual cash needs at $28,000 (if she needs more, she will work odd

jobs). Janice believes she can invest her savings at 8% until she depletes her funds.


1. How much money does Janice need now to fund her travels?

2. After speaking with a number of banks, Janice learns she will only be able to

invest her funds at 4%. How much does she need now to fund her travels?


E26-24 Using NPV and profitability index to make capital investment decisions

Use the NPV method to determine whether Kyler Products should invest in the

following projects:

P26-38 Using payback, ARR, NPV, and IRR to make capital investment


This problem continues the Davis Consulting, Inc. situation from Problem P25-34

of Chapter 25. Davis Consulting is considering purchasing two different types of

servers. Server A will generate net cash inflows of $25,000 per year and have a zero

residual value. Server A’s estimated useful life is three years and it costs $40,000.

Server B will generate net cash inflows of $25,000 in year 1, $11,000 in year 2,

and $4,000 in year 3. Server B has a $4,000 residual value and an estimated life of

three years. Server B also costs $40,000. Davis’s required rate of return is 14%.


1. Calculate payback, accounting rate of return, net present value, and internal

rate of return for both server investments. Use Microsoft Excel to calculate NPV

and IRR.

2. Assuming capital rationing applies, which server should Davis invest in?


Get 20% Discount on This Paper
Pages (550 words)
Approximate price: -

Try it now!

Get 20% Discount on This Paper

We'll send you the first draft for approval by at
Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

Academic Solvers has put together a group of highly qualified writers with a wide range of expertise in the online writing community. Our goal is to become your one-stop shop for all academic and online writing needs. Take a look at our fantastic service below!


Research Paper Editing

At Academic SolversEditing your research paper could prove to be difficult especially amidst the tight schedules that students have. At, we offer research paper editing services. The services include proofreading and use of online platforms such as Grammarly and Turnitin to address any concerns that may arise within the paper. Get our services and you will have satisfactory results.

Research Paper

Custom Research Paper

Writing a research paper could be quite hectic especially if it is your first time. Identifying the research topic, finding the references and interpreting information could pose significant challenges. However, this should not be issues of concern anymore. At, we offer solutions to research papers. We deliver plagiarism free and quality research papers that are customized to suit your needs.


Online Proofreading

Despite writing expertise and skills, you are never guaranteed of error free papers. Academic solvers’ online proofreading services leaves no mistake unaddressed. We go through your paper using a variety of online tools that help to ensure that we edit your paper and make it error free. We have collected a group of experts hence can guarantee quality proofreading services.


Cheap Research Papers

Do you have difficulties writing your research paper? Are you afraid of the cost of hiring a professional to write your research papers? Worry no more. At we address both of your problems. We are equipped with a large number of professional writers. Second, we offer our research paper writing services at cheap prices that are largely affordable. Don’t miss this chance. Order our cheap research papers today.


College Assignment

College assignment could be one of the biggest challenges to students especially working with tight schedules. acts to bridge this gap existing between getting satisfactory grades and meeting deadlines. Our college assignment professionals provide students with quality, plagiarism free and confidential assignment help that helps them to achieve desired grades and outcomes.


Essay Help

Essays are some of the most critical elements in the academic life of a student. At academic solvers we prioritize providing quality essays. As such, our professional ensure that they address issues of grammar, structure and plagiarism to provide essays that meet the need of the client. Here, we focus on developing content that aims at addressing the subject in question through the expertise of our professional and experienced writers. Try our services and we guarantee succes.