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Jill Harrington, a manager at Jennings Company, is considering several potential capital investment projects. Data on these projects follow: Project X $ 40,000 25,000 45,000 Project Y Project Z $ 20,000 10,000 $ 50,000 25,400 70,000 33,000 Initial investment Annual cash inflows PV of cash inflows Required: 1. Compute the payback period for each project and rank order them based on this criterion. 2. Compute the NPV of each project and rank order them based on this criterion. 3. Compute the profitability index of each project and rank order them based on this criterion. 4. If Jennings has limited funds to invest, which ranking should Jill recommend?

Jill Harrington, a manager at Jennings Company, is considering several potential capital investment projects. Data on these projects follow: Project X $ 40,000 25,000 45,000 Project Y Project Z $ 20,000 10,000 $ 50,000 25,400 70,000 33,000 Initial investment Annual cash inflows PV of cash inflows Required: 1. Compute the payback period for each project and rank order them based on this criterion. 2. Compute the NPV of each project and rank order them based on this criterion. 3. Compute the profitability index of each project and rank order them based on this criterion. 4. If Jennings has limited funds to invest, which ranking should Jill recommend?

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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Complete this question by entering your answers in the tabs below. Required 1 Required 2 Project X Project Y Project Z $ $ $ Compute the NPV of each project and rank order them based on this criterion. NPV X Answer is complete but not entirely correct. Required 3 Rank 86,363 2 71,818 x 3 145,454 X 1 X X Required 4 ✓ < Required 1 Required 3 >
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Required 1 Required 2 Project X Project Y Project Z $ $ $ Compute the NPV of each project and rank order them based on this criterion. NPV X Answer is complete but not entirely correct. Required 3 Rank 86,363 2 71,818 x 3 145,454 X 1 X X Required 4 ✓ < Required 1 Required 3 >
Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Jill Harrington, a manager at Jennings Company, is considering several potential capital investment projects. Data on these projects follow: Initial investment Annual cash inflows PV of cash inflows Required 1 Project X $ 40,000 25,000 45,000 Required: 1. Compute the payback period for each project and rank order them based on this criterion. 2. Compute the NPV of each project and rank order them based on this criterion. 3. Compute the profitability index of each project and rank order them based on this criterion. 4. If Jennings has limited funds to invest, which ranking should Jill recommend? Required 2 Complete this question by entering your answers in the tabs below. NPV Project Y $ 20,000 10,000 33,000 Required 3 Project Z $ 50,000 25,400 70,000 X Answer is complete but not entirely correct. Rank Required 4 Compute the NPV of each project and rank order them based on this criterion. Return to
Transcribed Image Text:Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Jill Harrington, a manager at Jennings Company, is considering several potential capital investment projects. Data on these projects follow: Initial investment Annual cash inflows PV of cash inflows Required 1 Project X $ 40,000 25,000 45,000 Required: 1. Compute the payback period for each project and rank order them based on this criterion. 2. Compute the NPV of each project and rank order them based on this criterion. 3. Compute the profitability index of each project and rank order them based on this criterion. 4. If Jennings has limited funds to invest, which ranking should Jill recommend? Required 2 Complete this question by entering your answers in the tabs below. NPV Project Y $ 20,000 10,000 33,000 Required 3 Project Z $ 50,000 25,400 70,000 X Answer is complete but not entirely correct. Rank Required 4 Compute the NPV of each project and rank order them based on this criterion. Return to
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