Splish BrothersCompany is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $640000 $840000 Annual net income 60000 46000 Net annual cash 192000 204000 inflow Estimated useful life 5 years 6 years Salvage value The company requires a 10% rate of return on all new investments. Present Value of an Annuity. of 1 Periods 9% 10% 11% 12% 5 3.89 3.791 3.696 3.605 6 4.486 4.355 4.231 4.111 The internal rate of return for Project Nuts is approximately O10%. 11%. O12%. O9%.
Splish BrothersCompany is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $640000 $840000 Annual net income 60000 46000 Net annual cash 192000 204000 inflow Estimated useful life 5 years 6 years Salvage value The company requires a 10% rate of return on all new investments. Present Value of an Annuity. of 1 Periods 9% 10% 11% 12% 5 3.89 3.791 3.696 3.605 6 4.486 4.355 4.231 4.111 The internal rate of return for Project Nuts is approximately O10%. 11%. O12%. O9%.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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