Proposals L and K each cost $600,000, have 6-year lives, and haveexpected total cash inflows of $720,000. Proposal L is expected toprovide equal annual net cash flows of $170,000, while the net cashflows for Proposal K are as follows:Year 1$250,000Year 2200,000Year 3100,000Year 450,000Year 5100,000Year 620,000$720,000Determine the cash payback period for each proposal. Round youranswers to two decimal places.Proposal LyearsProposal Kyears

Calculate the payback period as follows: Cash payback period = Initial investment/ Net cash inflows…

Answered: Proposals L and K each cost $600,000,…

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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Similar questions

The following are the cash flows of two independent projects: Year Project A Project B 0 $ (270 ) $ (270 ) 1 150 170 2 150 170 3 150 170 4 150 a. If the opportunity cost of capital is 12%, calculate the NPV for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Proposals L and K each cost $500,000, have 6-year lives, and have expected total cash flows of $750,000. Proposal L is expected to provide equal annual net cash flows of $125,000, while the net cash flows for Proposal K are as follows: Year 1 $250,000 Year 2 200,000 Year 3 100,000 Year 4 90,000 Year 5 60,000 Year 6 50,000 $750,000 Determine the cash payback period for each proposal. Round your Proposal K answer to one decimal place. Cash Payback Period Proposal L fill in the blank 1 years Proposal K fill in the blank 2 years
For year 6, a project requires Accounts Receivable of $121,000; Inventory of $51,000; and Accounts Payable of $107,000. Each of these will return to zero in year 7. What year 7 incremental cash flow reflects the change in NWC? Enter your answer in dollars and be sure to use a negative sign (-) if the answer is a cash outflow. X -65,000
For each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box. The future worth in year 8 of an arithmetic gradient cash flow series for years 1 through 8 is $800,000. If the gradient increase each year is $5,000, determine the cash flow in year 1 at an interest rate of 10% per year.
Phoenix Company is considering investments in projects C1 and C2. Both require an initial investment of $222,000 and would yield the following annual net cash flows. (PV of $1. EV of $1. PVA of $1, and EVA of $1) Note: Use appropriate factor(s) from the tables provided. Net cash flows Year 1 Year 2 Year 3 Totals Project C1 $ 10,000 106,000 166,000 $ 282,000 Project C2 $ 94,000 94,000 94,000 $ 282,000 a. The company requires a 12% return from its investments. Compute net present values using factors from Table B.1 in Appendix B to determine which projects, if any, should be accepted. b. Using the answer from part a, is the internal rate of return higher or lower than 12% for (i) Project C1 and (ii) Project C2? Hint: It is not necessary to compute IRR to answer this question. Complete this question by entering your answers in the tabs below. Required A Required B The company requires a 12% return from its investments. Compute net present values using factors from Table B.1 in Appendix B…
A project has an initial cash outflow of $40,500 and produces cash inflows of $16,450, $17,800, and $16842 for Years 1 through 3, respectively. What is the NPV at a discount rate of 12.4 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Munabhai
One project with initial cost of 29350 is expedited to generate cash flows of 7200 9300 9400 8300 and 8000 over each of the next five years respectively. What is the projects playback period?
IF THE TOTAL CASH INFLOWS FOR 5 YEARS IS $540,000.00, (WITH A HIGHEST INFLOW OF $150,000.) COMPUTE FOR THE PAYBACK RECIPROCAL IF THE INVESTMENT IS SET AT $ 300,000.00. 0.55 0.36 1.8 0.50 2.78

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