AA Payback period years Indicating the most desirable project and the least desirable project Most desirable Least desirable eTextbook and Media
AA Payback period years Indicating the most desirable project and the least desirable project Most desirable Least desirable eTextbook and Media
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Unit VIII question 14 part A

Transcribed Image Text:222
Whispering Winds Manufacturing Company is considering three new projects, each requiring an equipment investment of $27,100.
Each project will last for 3 years and produce the following cash flows.
BB
A.
$8,700
$11,700
$12,700
1.
2.
10,700
11,700
16,700
11,700
10,700
3.
Total
%2436,100
$35,100
$35,100
The salvage value for each of the projects is zero. Whispering Winds uses straight-line depreciation. Whispering Winds will not accept
any project with a payback period over 2.2 years. Whispering Winds's minimum required rate of return is 12%.
TABLE 3 Present Value of L
Periods
92503
,91743
80286
92456
60606
00068
0.87344
796
85734
3.
4.
21178
6119
86384
65752
62092
56743
74622
70496
59627
37594
9918
40388
9099
690
70259
18
19FF
169
0692
28426
0616
0.54303
50025
DIF TU
.35218
67556
1909
42241
%3D
12
64958
38753
31728
.4288
35049
28748
21494
09
0057
18955
46884
L696E
0.44401
11/
.32618
35554
31863
25751
99687
8995
50507
२P८/S:
0.38782
34046
.26333
1.
55526
12289
O0607"
16E
45811
LEEIS
39365
37136
35034
21763
£9
41552
98
,13768
39573
TROS0
IS0E
0.25842
47464
0.27615
.16351
31180
T191
.17843
-12403
20.
రార
TABLE 4 Present Value of an Annuity of I
Payments
96154
95238
0.93458
92593
91743
1.80802 1.78326 1.7591I 1.73554 1.71252
86957
60606
6096
272325267301
3.545953.46511 3.38721 331213 3.23972 3.16986 3.10245
06
2.62432 2.57710 2.53130 2.48685 2 44371 2.401s3 2.28323
3.03735 285498
3.60590 360478 3.3521l6
4.622RR 4.48502 4.35526 4.23054 411141 378448
4.45182
5.24214
673274
7.43533
646321 20079 5.97130 5.74664 5.53482 532403 5.14612 496764 448732
6.51523 624689 5.99525, 5.75902 553705 532825 4.77158
5.65022 5.01877
7.02358
41766 614457
11
twEwEWSてと
8.35765 7.90378 7.48650 7.10336 6.74987 s-42355 5.58315
9.38507
12
10.56312
9.89864
8.74547 8.24424 7.78G15 7.36669
6.98187
8.55948
8.06069
2806 0909
0.81086 5.84737

Transcribed Image Text:TABLE 4 Present Value of an Annuity of I
(1)
Payments
15
91743
60006
173554 171252 169005
92593
06006
1.62571
2.48685 244371 2.40183 2.28323
3.38721 3.31213 3.23972 3.16986 3.10245 3.03735 2.85498
4.10020 3.99271 3.88965 3.79079 3.69590 3.60478 3.35216
5.24214 5.07569 491732 4.76654 4.62288 4.48592 4.35526 4.23054 4.11141 3.78448
5.58238 5.38929 5.20637 5.03295 4.86842 4.71220 4.56376 4.16042
5.14612 4.96764 4.48732
6.51523 6.24689 5.99525 5.75902 553705 532825 4.77158
5.88923 565022 5.01A77
2.
6098
262432 2.57710 253130
066
4.45182 4.32948
3.AA965
5.
6.
6.73274
646321
6.20979 5.071 30 5.74664 553482 5.33403
7.72173 7.3009 7.02458 6.71008 6.41766 6.14457
A.R6325 A38384
9.39357 8.85268
9.89864
7.49867 7.13896 6.80519 6.49506 6.20652 5.93770 5.23371
7.94269 7.5608 7.16073 6A1369 6 49226 6.19437 542062
8.35765 7.900378 7.48690 7.10336 674987 6.42355 558315
8.74547 8.24424 7.78615 7.36669 6.98187 662817 5.7244R
98019 06
7.60608 7.19087 6.81086 5.84737
9.38507
12
13.
14
10.56312
1.
11.65230 10 83777 10.10590
12.16567
7.37916 697399 5.95424
854363 8.02155 754879711963 6.04716
10.05909 9.37180 875563 A.20141 7.70162 724967 6,12797
9,44665 8.85137 A31256 7.82371
9.76322 9.12164
I1.68959 10.82760
13.13394
13.59033 12.46221
10.59401 9.81815 912855 851356 7.96333 7.6944 6.25931
26691 11
20.
(a)
Compute each project's payback period. (Round answers to 2 decirmal places, eg. 52.75.)
AA
BB
Dつ
Payback period
years
years
Indicating the most desirable project and the least desirable project using this method.
Most desirable
Least desirable
e Textbook and Media
Attempts: 0 of 3 used
Submit Answer
(b)
The parts of this question must be completed in order. This part will be available when you complete the part above.
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON

Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education

Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education