Sharon is hoping that an investment of $30,300 will provide additional revenue to the store of $18,100 per year for 3 years. Her partner in crime, Brian, is confident that a larger investment of $40,300 will be required to bring in a steady flow of $23,000 in new revenue per year for 3 years. Determine the discounted payback period for each investment (using before tax cash flows). The company's required rate of return is 8%. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and final answers to 2 decimal places eg. 15.25.) Click here to view the factor table Discounted payback period Sharon Sharon years Whose investment appears to better use the company's resources? Brian years
Sharon is hoping that an investment of $30,300 will provide additional revenue to the store of $18,100 per year for 3 years. Her partner in crime, Brian, is confident that a larger investment of $40,300 will be required to bring in a steady flow of $23,000 in new revenue per year for 3 years. Determine the discounted payback period for each investment (using before tax cash flows). The company's required rate of return is 8%. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and final answers to 2 decimal places eg. 15.25.) Click here to view the factor table Discounted payback period Sharon Sharon years Whose investment appears to better use the company's resources? Brian years
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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Transcribed Image Text:Sharon is hoping that an investment of $30,300 will provide additional revenue to the store of $18,100 per year for 3 years. Her
partner in crime, Brian, is confident that a larger investment of $40,300 will be required to bring in a steady flow of $23,000 in new
revenue per year for 3 years.
Determine the discounted payback period for each investment (using before tax cash flows). The company's required rate of return is
8%. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and final answers to 2 decimal places eg. 15.25.)
Click here to view the factor table
Discounted payback period
Sharon
Sharon
years
Whose investment appears to better use the company's resources?
Brian
years
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