Staple Company is considering two capital investment proposals.Estimates regarding each project are provided below:Project BeansProject RiceInitial investmentAnnual net incomeNet annual cash flowEstimated useful lifeSalvage valuePeriods569%The company requires a 10% rate of return on all new investments.Present Value of an Annuity of 111% 12%3.8904.48610%3.791$400,0004.35520,000100,0005 years-0-3.6964.231$600,00042,000142,0006 years-0-The net present value for Project Rice is3.6054.111

Staple Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project Beans Project Rice Initial investment Annual net income Net annual cash flow Estimated useful life Salvage value Periods 5 6 9% 3.890 4.486 $400,000 3.791 20,000 100,000 The company requires a 10% rate of return on all new investments. Present Value of an Annuity of 1 10% 11% 12% 5 years -0- 3.696 4.355 4.231 $600,000 The net present value for Project Rice is 42,000 142,000 6 years -0- 3.605 4.111

Staple Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project Beans Project Rice Initial investment Annual net income Net annual cash flow Estimated useful life Salvage value Periods 5 6 9% 3.890 4.486 $400,000 3.791 20,000 100,000 The company requires a 10% rate of return on all new investments. Present Value of an Annuity of 1 10% 11% 12% 5 years -0- 3.696 4.355 4.231 $600,000 The net present value for Project Rice is 42,000 142,000 6 years -0- 3.605 4.111

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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