Healthy Food, Inc.  is considering two investments.  Each costs $10,000 but they have different cash flows which are below.  Compute the payback period for each.                      Year                  Project A Project B 1 $12,000 $10,000 2 8,000 6,000 3 6,000 16,000 and if Healthy food Inc. plans to purchase a new machine that will increase its manufacturing  speed and save the company money. The cost of this machine is $66,000. The annual cash flow projections are below.  If the cost of capital is 10 percent, what is the net present value?                           Year                                        Cash Flow                            1.......................................       $21,000                            2.......................................         29,000                            3.......................................         36,000                            4.......................................         16,000

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Healthy Food, Inc.  is considering two investments.  Each costs $10,000 but they have different cash flows which are below.  Compute the payback period for each.                   

 

Year

                 Project A

Project B

1

$12,000

$10,000

2

8,000

6,000

3

6,000

16,000

and if

Healthy food Inc. plans to purchase a new machine that will increase its manufacturing  speed and save the company money. The cost of this machine is $66,000. The annual cash flow projections are below.  If the cost of capital is 10 percent, what is the net present value?

 

                        Year                                        Cash Flow

                           1.......................................       $21,000

                           2.......................................         29,000

                           3.......................................         36,000

                           4.......................................         16,000

                           5.......................................           8,000

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