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Payback period and discounted payback period (using 5% rate of return) Initial Investment is 300,000 Net Income  July 36,000 August 12,300 September 21,000 October 9,600 November 17,650 December 61,500

Payback period and discounted payback period (using 5% rate of return) Initial Investment is 300,000 Net Income  July 36,000 August 12,300 September 21,000 October 9,600 November 17,650 December 61,500

Essentials Of Investments
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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Payback period and discounted payback period (using 5% rate of return)

Initial Investment is 300,000

Net Income 

July 36,000
August 12,300
September 21,000
October 9,600
November 17,650
December 61,500
Given Expected Net Cash Flows Year Project L ▪0 <$100> 1 10 ▪ 2 60 ■ 3 80 Notes: At Year or Month 0 put all your invested cash here then per month input your net income Computation Payback for Franchise L 0 1 CFt -100 10 Cumulative -100 -90 Payback = 2 + $30/$80 = 2.375 years 2 2.4 3 60 80 -30 0 50
Transcribed Image Text:Given Expected Net Cash Flows Year Project L ▪0 <$100> 1 10 ▪ 2 60 ■ 3 80 Notes: At Year or Month 0 put all your invested cash here then per month input your net income Computation Payback for Franchise L 0 1 CFt -100 10 Cumulative -100 -90 Payback = 2 + $30/$80 = 2.375 years 2 2.4 3 60 80 -30 0 50
Donutritious Food Corp. Projected Statement of Financial Performance Second Half of 2022 2022 Sept Oct Aug Nov July P 120,000 P90,000 P96,000 P102,000 P87,000 17,000 20,000 15,000 14,500 15,000 P 100,000 P 75,000 P 85,000 P 72,500 P 81,000 5,000 5,000 5,000 5,000 5,000 4,000 4,000 4,000 4,000 4,000 50,000 50,000 50,000 50,000 50,000 500 500 500 500 500 3,000 3,000 3,000 3,000 3,000 0 0 750 700 800 1,000 500 200 400 100 P 64,000 P 62,700 P 64,000 P 62,900 P 63,350 P 36,000 P 12,300 P 21,000 P 9,600 P 17,650 Total Projected Sales in Pesos Less: Cost of Goods Sold Gross Profit Less: Operating Expenses Rent Expense Utilities Expense Salaries Expense Transportation Expense Insurance Expense Advertising Expense Miscellaneous Expense Total Operating Expenses Net Income Dec P150,000 25,000 P 125,000 5,000 4,000 50,000 500 3,000 800 200 P 63,500 P 61,500
Transcribed Image Text:Donutritious Food Corp. Projected Statement of Financial Performance Second Half of 2022 2022 Sept Oct Aug Nov July P 120,000 P90,000 P96,000 P102,000 P87,000 17,000 20,000 15,000 14,500 15,000 P 100,000 P 75,000 P 85,000 P 72,500 P 81,000 5,000 5,000 5,000 5,000 5,000 4,000 4,000 4,000 4,000 4,000 50,000 50,000 50,000 50,000 50,000 500 500 500 500 500 3,000 3,000 3,000 3,000 3,000 0 0 750 700 800 1,000 500 200 400 100 P 64,000 P 62,700 P 64,000 P 62,900 P 63,350 P 36,000 P 12,300 P 21,000 P 9,600 P 17,650 Total Projected Sales in Pesos Less: Cost of Goods Sold Gross Profit Less: Operating Expenses Rent Expense Utilities Expense Salaries Expense Transportation Expense Insurance Expense Advertising Expense Miscellaneous Expense Total Operating Expenses Net Income Dec P150,000 25,000 P 125,000 5,000 4,000 50,000 500 3,000 800 200 P 63,500 P 61,500
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