Information for two alternative projects involving machinery Investments follows. Project 1 requires an initial investment of $148,000. Project 2 requires an initial investment of $133,000. 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 69 $ Income Project 1 120,000 Project 1 $ 120,000 70,000 25,000 13,000 12,000 70,000 25,000 13,000 $ 12,000 Cash Flow Project 2 $ 100,000 $ 37,000 23,000 25,000 $ 15,000 Income Project 2 $ 100,000 37,000 23,000 25,000 15,000 Cash Flow
Information for two alternative projects involving machinery Investments follows. Project 1 requires an initial investment of $148,000. Project 2 requires an initial investment of $133,000. 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 69 $ Income Project 1 120,000 Project 1 $ 120,000 70,000 25,000 13,000 12,000 70,000 25,000 13,000 $ 12,000 Cash Flow Project 2 $ 100,000 $ 37,000 23,000 25,000 $ 15,000 Income Project 2 $ 100,000 37,000 23,000 25,000 15,000 Cash Flow
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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Transcribed Image Text:Information for two alternative projects involving machinery Investments follows. Project 1 requires an initial Investment of $148,000.
Project 2 requires an initial investment of $133,000.
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
Compute each project's annual net cash flow.
Complete this question by entering your answers in the tabs below.
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
120,000
< Required A
Project 1
$ 120,000
70,000
25,000
13,000
12,000
70,000
25,000
13,000
$ 12,000
Cash Flow
$
Project 2
$ 100,000
Required B >
37,000
23,000
25,000
$ 15,000
Project 2
$ 100,000
Income
37,000
23,000
25,000
15,000
Cash Flow
Transcribed Image Text:Required A Required B
Compute payback period for each investment.
Project 1
Project 2
Numerator:
1
Payback Period
Denominator:
< Required A
=
=
Required B >
Payback period
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