P 9-1 Investment Scenarios (LO 9-3) Arkansas Best Freightways is considering a purchase of three different potential trucks. it is considering three different investment scenarios and their respective cash flows. Arkansas Best Freightways use a cost of capital of 9 percent to evaluate the investments. Year Year (today) Year 1 Year 2 Year 3 Year 4 Buy new truck Increased profits Increased profits Increased profits Increased profits Investment 1 (85,000) 25,000 25,000 25,000 25,000 Net cash flows over life (not discounted) Investment 2 (105,000) 20,000 30,000 40,000 50,000 Investment 3 (125,000) 40,000 Answer is complete and correct. Investment 2 Investment 1 15.000 35,000 30,000 20,000 10,000 Required: 1. Calculate the net cash flows (not discounted) over the life of the three investments (years 0 to 4). (Negative amounts should be entered using a minus sign.) Investment 3 Cost of Capital 9% (25.000)

P 9-1 Investment Scenarios (LO 9-3) Arkansas Best Freightways is considering a purchase of three different potential trucks. it is considering three different investment scenarios and their respective cash flows. Arkansas Best Freightways use a cost of capital of 9 percent to evaluate the investments. Year Year (today) Year 1 Year 2 Year 3 Year 4 Buy new truck Increased profits Increased profits Increased profits Increased profits Investment 1 (85,000) 25,000 25,000 25,000 25,000 Net cash flows over life (not discounted) Investment 2 (105,000) 20,000 30,000 40,000 50,000 Investment 3 (125,000) 40,000 Answer is complete and correct. Investment 2 Investment 1 15.000 35,000 30,000 20,000 10,000 Required: 1. Calculate the net cash flows (not discounted) over the life of the three investments (years 0 to 4). (Negative amounts should be entered using a minus sign.) Investment 3 Cost of Capital 9% (25.000)

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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Cash Payback Period for a Service Company
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