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Crane 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 $164,000 $180,500 $204,000 Annual net income: Year 1 14,420 18,540 27,810 14,420 17,510 23,690 14,420 16,480 21,630 4 14,420 12,360 13,390 14,420 9,270 12,360 Total $72,100 $74,160 $98,880 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. Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) Project Bono years Project Edge years Project Clayton years

Crane 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 $164,000 $180,500 $204,000 Annual net income: Year 1 14,420 18,540 27,810 14,420 17,510 23,690 14,420 16,480 21,630 4 14,420 12,360 13,390 14,420 9,270 12,360 Total $72,100 $74,160 $98,880 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. Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) Project Bono years Project Edge years Project Clayton years

Essentials Of Investments
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
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Crane 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 $164,000 $180,500 $204,000 Annual net income: Year 1 14,420 18,540 27,810 2 14,420 17,510 23,690 14,420 16,480 21,630 4 14,420 12,360 13,390 14,420 9,270 12,360 Total $72,100 $74,160 $98,880 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. Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) Project Bono years Project Edge years Project Clayton years
Transcribed Image Text:Crane 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 $164,000 $180,500 $204,000 Annual net income: Year 1 14,420 18,540 27,810 2 14,420 17,510 23,690 14,420 16,480 21,630 4 14,420 12,360 13,390 14,420 9,270 12,360 Total $72,100 $74,160 $98,880 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) Click here to view the factor table. Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) Project Bono years Project Edge years Project Clayton years
Compute the net present value for each project. (Round answers to 0 decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Project Bono Project Edge Project Net present value 2$ $ 2$ eTextbook and Media Compute the annual rate of return for each project. (Hint: Use average annual net income in your computation.) (Round answers to 2 decimal places, e.g. 10.50%.) Project Bono Project Edge Pro Annual rate of return %
Transcribed Image Text: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 Net present value 2$ $ 2$ eTextbook and Media Compute the annual rate of return for each project. (Hint: Use average annual net income in your computation.) (Round answers to 2 decimal places, e.g. 10.50%.) Project Bono Project Edge Pro Annual rate of return %
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### Net Present Value Calculation for Projects #### Instructions: Compute the net present value (NPV) for each project. Ensure your answers are rounded to 0 decimal places (e.g., 125). If the net present value is negative, use either a negative sign preceding the number (e.g., -45) or parentheses (e.g., (45)). For calculation purposes, use 5 decimal places as displayed in the factor table provided. #### Projects: - **Project Bono** - **Project Edge** - **Project Clayton** #### Input Fields: You will find three input boxes corresponding to each project where you are expected to enter the net present value. - **Net Present Value for Project Bono:** \[__________\] - **Net Present Value for Project Edge:** \[__________\] - **Net Present Value for Project Clayton:** \[__________\] #### Example: - **Project Bono:** $125 - **Project Edge:** $(45) - **Project Clayton:** $-75 #### Submission Details: - You can save your work by clicking **"Save for Later."** - Each student is allowed four attempts to submit their answer. - Click the **"Submit Answer"** button when you are ready to submit your computations. #### Note: Ensure accuracy as this activity is crucial for understanding the financial assessment of different projects. Properly rounding and sign notation is vital for clarity and correctness.
Transcribed Image Text:### Net Present Value Calculation for Projects #### Instructions: Compute the net present value (NPV) for each project. Ensure your answers are rounded to 0 decimal places (e.g., 125). If the net present value is negative, use either a negative sign preceding the number (e.g., -45) or parentheses (e.g., (45)). For calculation purposes, use 5 decimal places as displayed in the factor table provided. #### Projects: - **Project Bono** - **Project Edge** - **Project Clayton** #### Input Fields: You will find three input boxes corresponding to each project where you are expected to enter the net present value. - **Net Present Value for Project Bono:** \[__________\] - **Net Present Value for Project Edge:** \[__________\] - **Net Present Value for Project Clayton:** \[__________\] #### Example: - **Project Bono:** $125 - **Project Edge:** $(45) - **Project Clayton:** $-75 #### Submission Details: - You can save your work by clicking **"Save for Later."** - Each student is allowed four attempts to submit their answer. - Click the **"Submit Answer"** button when you are ready to submit your computations. #### Note: Ensure accuracy as this activity is crucial for understanding the financial assessment of different projects. Properly rounding and sign notation is vital for clarity and correctness.
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