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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

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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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