Stenson, Inc., imposes a payback cutoff of three years for its international investmentprojects. Assume the company has the following two projects available.Year Cash Flow A Cash Flow B-$58,000 -$103,00023,50030,80025,50011,50025,50030,50028,500237,00012What is the payback period for each project? (Do not round intermediate calculationsand round your answers to 2 decimal places, e.g., 32.16.)Project AyearsProject ByearsWhich, if either, project(s) should the company accept?

The payback period method is an important technique of capital budgeting. It is also known as the…

Stenson, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. 了富 Year Cash Flow A Cash Flow B -$58,000 23,500 30,800 25,500 11,500 -$103,000 25,500 30,500 28,500 237,000 1 2 4 What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project A years Project B years Which, if either, project(s) should the company accept?

Stenson, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. 了富 Year Cash Flow A Cash Flow B -$58,000 23,500 30,800 25,500 11,500 -$103,000 25,500 30,500 28,500 237,000 1 2 4 What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project A years Project B years Which, if either, project(s) should the company accept?

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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When evaluating international investment projects, Checks Inc. imposes a payback cutoff of three years. Year Cash Flow (A) Cash Flow (B) 0 -$ 40,000 -$ 55,000 1234 14,000 11,000 18,000 13,000 17,000 16,000 4 11,000 255,000 What is the payback period for both projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project A Project B years years Which project should the company accept? O Project B O Project A
Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash Flow (A) 0 -$56,000 1 2 3 4 22,500 29,600 24,500 10,500 Cash Flow (B) -$ 101,000 a. Project A Project B b. Project acceptance 24,500 29,500 29,500 239,000 a. What is the payback period for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. Which, if either, of the projects should the company accept? years years
Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Year Cash Flow (A) Cash Flow (B) 01234 -$40,000 14,000 18,000 17,000 11,000 -$ 55,000 11,000 13,000 16,000 255,000 What is the payback period for both projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project A Project B years years Which project should the company accept? O Project A Project B
es Andouille Spices, Incorporated, has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 14 percent. Year 0 Project F -$ 138,000 Project G -$ 208,000 12345 58,500 38,500 51,500 53,500 61,500 91,500 4 56,500 121,500 51,500 136,500 a. Calculate the payback period for both projects. Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. Calculate the NPV for both projects. Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. c. Which project, if any, should the company accept? a. Project F Project G b. Project F C. Project G Project G years years
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Emusk Inc. is evaluating two mutually exclusive projects. The required rate of return on these projects is 8%. Calculate the profitability index for project A. (Round to 3 decimals) Year 0 1 2 3 4 5 Project A -15,000,000 2,000,000 3,000,000 5,000,000 5,000,000 6,000,000 Project B -15,000,000 6,000,000 6,000,000 6,000,000 1,000,000 1,000,000
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Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash Flow (A) -$ 59,000 Cash Flow (B) 01234 24,000 31,400 26,000 12,000 -$ 104,000 26,000 31,000 28,000 236,000 a. What is the payback period for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. Which, if either, of the projects should the company accept? a. Project A years Project B years b. Project acceptance Accept Project A and reject Project B
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Randall's Ales & Porters S.A., is considering expanding into Costa Rica. As an incentive, Costa Rica agrees not to charge the company any taxes. The project has the following estimated data: price = $94 per unit variable costs = $50.76 per unit fixed costs = $7,600 required return = 16 percent initial investment = $11,000 life = three years depreciable life = three years, straight-line. Required: (a)What is the accounting break-even quantity? (Do not round your intermediate calculations.) (Click to select) ♥ (b)What is the cash break-even quantity? (Do not round your intermediate calculations.) (Click to select) ♥ (c) What is the financial break-even quantity? (Do not round your intermediate calculations.) (Click to select) ♥
Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash Flow (A) 0 1 2 3 4 -$ 40,000 14,000 18,000 17,000 11,000 Cash Flow (B) -$ 55,000 11,000 13,000 16,000 255,000 a. What is the payback period for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. Which, if either, of the projects should the company accept? a. Project A Project B b. Project acceptance years years

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