Proposals M and N each cost $550,000, have 6-year lives, and have expected total cash flows of $750,000. Proposal M is expected to provide equal annual net cash flows of $125,000, while the net cash flows for Proposal N are as follows: Year 1 $250,000 Year 2 200,000 Year 3 150,000 Year 4 75,000 Year 5 50,000 Year 6 25,000 $750,000 Determine the cash payback period for each proposal. Round your answers to three decimal places.
Proposals M and N each cost $550,000, have 6-year lives, and have expected total cash flows of $750,000. Proposal M is expected to provide equal annual net cash flows of $125,000, while the net cash flows for Proposal N are as follows: Year 1 $250,000 Year 2 200,000 Year 3 150,000 Year 4 75,000 Year 5 50,000 Year 6 25,000 $750,000 Determine the cash payback period for each proposal. Round your answers to three decimal places.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 10P: Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year...
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Proposals M and N each cost $550,000, have 6-year lives, and have expected total
Year 1 | $250,000 | |
Year 2 | 200,000 | |
Year 3 | 150,000 | |
Year 4 | 75,000 | |
Year 5 | 50,000 | |
Year 6 | 25,000 | |
$750,000 |
Determine the cash payback period for each proposal. Round your answers to three decimal places.
Proposal M | ________?_______ years |
Proposal N | ________?________years |
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