Blossom Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Capital investment Annual net income: Year 1 2 Total 3 4 Project Bono $165,000 14,280 14,280 14,280 14,280 14,280 $71,400 D Project Edge Project Clayton $179,000 $202,000 18,360 17,340 16,320 12,240 9,180 $73,440 27,540 23,460 21,420 13,260 12,240 $97.920 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) Click here to view the factor table.
Blossom Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Capital investment Annual net income: Year 1 2 Total 3 4 Project Bono $165,000 14,280 14,280 14,280 14,280 14,280 $71,400 D Project Edge Project Clayton $179,000 $202,000 18,360 17,340 16,320 12,240 9,180 $73,440 27,540 23,460 21,420 13,260 12,240 $97.920 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) Click here to view the factor table.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Subject: acounting
Transcribed Image Text:Blossom Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant
data on each project are as follows.
Capital investment
Annual net income:
Year 1
2
3
Total
4
5
Project Bono
$165,000
14,280
14,280
14,280
14,280
14,280
$71,400
D
Project Edge Project Clayton
$179,000
$202,000
18,360
17,340
16,320
12,240
9,180
$73,440
27,540
23,460
21,420
13,260
12,240
$97.920
Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash.
flows occur evenly throughout the year.)
Click here to view the factor table.
Transcribed Image Text:Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.)
Project Bono
Project Edge
Project Clayton
eTextbook and Media
years
years
years
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