Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $268,000. Project 2 requires an initial investment of $170,000. Annual Amounts Sales of new product Expenses. Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income (a) Compute each project's annual net cash flow. (b) Compute payback period for each investment. Project 1 $ 180,000 Required A Required B 85,000 40,000 28,000 $ 27,000 Complete this question by entering your answers in the tabs below. Project 2 $ 160,000 52,000 38,000 40,000 $ 30,000
Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $268,000. Project 2 requires an initial investment of $170,000. Annual Amounts Sales of new product Expenses. Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income (a) Compute each project's annual net cash flow. (b) Compute payback period for each investment. Project 1 $ 180,000 Required A Required B 85,000 40,000 28,000 $ 27,000 Complete this question by entering your answers in the tabs below. Project 2 $ 160,000 52,000 38,000 40,000 $ 30,000
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
Section: Chapter Questions
Problem 1PS
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Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of
$268,000. Project 2 requires an initial investment of $170,000.
Annual Amounts
Sales of new product
Expenses
Materials, labor, and overhead (except depreciation)
Depreciation-Machinery
Selling, general, and administrative expenses
Income
(a) Compute each project's annual net cash flow.
(b) Compute payback period for each investment.
Required A Required B
Complete this question by entering your answers in the tabs below.
Compute payback period for each investment.
Project 1
Project 2
Numerator:
1
Payback Period
Denominator:
Project 1
$ 180,000
< Required A
85,000
40,000
28,000
$ 27,000
=
=
Project 2
$ 160,000
Required B
52,000
38,000
40,000
$ 30,000
Payback period
Transcribed Image Text:8
nts
eBook
Print
eferences
Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of
$268,000. Project 2 requires an initial investment of $170,000.
Annual Amounts
Sales of new product
Expenses
Materials, labor, and overhead (except depreciation)
Depreciation-Machinery
Selling, general, and administrative expenses
Income
(a) Compute each project's annual net cash flow.
(b) Compute payback period for each investment.
Required A Required B
Complete this question by entering your answers in the tabs below.
Compute each project's annual net cash flow.
Annual Amounts
Sales of new product
Expenses
Materials, labor, and overhead (except depreciation)
Depreciation Machinery
Selling, general, and administrative expenses
Income
Net cash flow
$
$
Income
Project 1
180,000
< Required A
Project 1
$ 180,000
85,000
40,000
28,000
27,000
85,000
40,000
28,000
$ 27,000
Cash Flow
Required B
$
Project 2
$ 160,000
>
52,000
38,000
40,000
$ 30,000
Project 2
$ 160,000
Income
52,000
38,000
40,000
30,000
Cash Flow
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