data on each project are as follows. Project Bono Project Edge Project Clayton Capital investment $170,000 $184,000 $210.000 Annual net income: Year 1 14,700 28,350

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Chapter1: Financial Statements And Business Decisions
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Unit VIII Question 16 part a

 

寸
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
$170,000
$184,000
$210,000
Annual net income:
Year 1
00.
000
14,700
17,850
24,150
2.
14,700
22,050
3.
000,
14,700
12,600
13,650
4.
14,700
9,450
5.
009
Total
$73,500
$75,600
00800
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 PV table.
(a)
Your answeris partially correct.
Compute the cash payback period for each project. (Roundanswers to 2 decimal places, e.g. 10.50.)
years
ouog palo
years
Project Edge
Project Clayton
years
eTextbook and Media
Submit Anawer
Attempts: 1 of 3 used
Save for Later
(b)
The parts of this question must be completed in order. This part will be available when you complete the part above.
Transcribed Image Text:寸 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 $170,000 $184,000 $210,000 Annual net income: Year 1 00. 000 14,700 17,850 24,150 2. 14,700 22,050 3. 000, 14,700 12,600 13,650 4. 14,700 9,450 5. 009 Total $73,500 $75,600 00800 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 PV table. (a) Your answeris partially correct. Compute the cash payback period for each project. (Roundanswers to 2 decimal places, e.g. 10.50.) years ouog palo years Project Edge Project Clayton years eTextbook and Media Submit Anawer Attempts: 1 of 3 used Save for Later (b) The parts of this question must be completed in order. This part will be available when you complete the part above.
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