Carla Vista 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. Project Bono Project Edge Project Clayton Capital investment $165,000 $183,000 $212,000 Annual net income: Year 1 15,400 19,800 29,700 2 15,400 18,700 25,300 3 15,400 17,600 23,100 4 15,400 13,200 14,300 5 15,400 9,900 13,200 Total $77,000 $79,200 $105,600 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. (a) Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) Project Bono enter a number of years rounded to 2 decimal places years Project Edge enter a number of years rounded to 2 decimal places years Project Clayton enter a number of years rounded to 2 decimal places
Carla Vista 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. Project Bono Project Edge Project Clayton Capital investment $165,000 $183,000 $212,000 Annual net income: Year 1 15,400 19,800 29,700 2 15,400 18,700 25,300 3 15,400 17,600 23,100 4 15,400 13,200 14,300 5 15,400 9,900 13,200 Total $77,000 $79,200 $105,600 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. (a) Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) Project Bono enter a number of years rounded to 2 decimal places years Project Edge enter a number of years rounded to 2 decimal places years Project Clayton enter a number of years rounded to 2 decimal places
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Carla Vista 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.
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.
Project Bono
|
Project Edge
|
Project Clayton
|
|||||
---|---|---|---|---|---|---|---|
Capital investment
|
$165,000 | $183,000 | $212,000 | ||||
Annual net income:
|
|||||||
Year 1
|
15,400 | 19,800 | 29,700 | ||||
2
|
15,400 | 18,700 | 25,300 | ||||
3
|
15,400 | 17,600 | 23,100 | ||||
4
|
15,400 | 13,200 | 14,300 | ||||
5
|
15,400 | 9,900 | 13,200 | ||||
Total
|
$77,000 | $79,200 | $105,600 |
Click here to view the factor table.
(a)
Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.)
Project Bono
|
enter a number of years rounded to 2 decimal places
|
years | |
---|---|---|---|
Project Edge
|
enter a number of years rounded to 2 decimal places
|
years | |
Project Clayton
|
enter a number of years rounded to 2 decimal places
|
years |
![View Policies
Current Attempt in Progress
Carla Vista 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
Total
2
3
5
сл
Project Bono
$165,000
15,400
15,400
15,400
15,400
15,400
$77,000
Project Edge
$183,000
19,800
18,700
17,600
13,200
9,900
$79,200
Project Clayton
$212,000
29,700
25,300
23,100
14,300
13,200
$105,600
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.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8f802d59-f46d-4e6b-a2ac-030578d87dc7%2F3bd6ca31-b886-4a43-b6de-21080cb6d705%2Fgcr56g_processed.png&w=3840&q=75)
Transcribed Image Text:View Policies
Current Attempt in Progress
Carla Vista 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
Total
2
3
5
сл
Project Bono
$165,000
15,400
15,400
15,400
15,400
15,400
$77,000
Project Edge
$183,000
19,800
18,700
17,600
13,200
9,900
$79,200
Project Clayton
$212,000
29,700
25,300
23,100
14,300
13,200
$105,600
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.)
![(a)
Compute the cash payback period for each project. (Round answers to 2 decimal places,
e.g. 10.50.)
Project Bono
Project Edge
Project Clayton
years
years
years](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8f802d59-f46d-4e6b-a2ac-030578d87dc7%2F3bd6ca31-b886-4a43-b6de-21080cb6d705%2F27d5cgg_processed.png&w=3840&q=75)
Transcribed Image Text:(a)
Compute the cash payback period for each project. (Round answers to 2 decimal places,
e.g. 10.50.)
Project Bono
Project Edge
Project Clayton
years
years
years
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Follow-up Questions
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Follow-up Question
Please, this is the next question
![b)
Compute the net present value for each project. (Round answers to O decimal places, e.g. 125. If the net present value is negative, use
either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in
the factor table provided.)
Net present value
tA
$
Project Bono
$
Project Edge
+A
$
Project Clayton](https://content.bartleby.com/qna-images/question/8f802d59-f46d-4e6b-a2ac-030578d87dc7/feecd1f8-dcc1-42b6-9324-5a710ba2e655/vf90v_thumbnail.png)
Transcribed Image Text:b)
Compute the net present value for each project. (Round answers to O decimal places, e.g. 125. If the net present value is negative, use
either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in
the factor table provided.)
Net present value
tA
$
Project Bono
$
Project Edge
+A
$
Project Clayton
Solution
Follow-up Question
Compute the net present value for each project. (Round answers to 0 decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
Project Bono
|
Project Edge
|
Project Clayton
|
|||||
---|---|---|---|---|---|---|---|
Net present value
|
$enter a dollar amount rounded to 0 decimal places | $enter a dollar amount rounded to 0 decimal places | $enter a dollar amount rounded to 0 decimal places |
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