The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash Year 1 Investment $ 68,000 $8,000 Cash Inflow $7,000 $ 14,000 2 3 $ 21,000 4 5 6 7 8 9 10 $ 22,000 $ 25,000 $ 23,000 $ 21,000 $ 19,000 $ 18,000 $ 18,000 Required: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large? Complete this question by entering your answers in the tabs below. Saved Required 1 Required 2 Determine the payback period of the investment. Note: Round your answer to 1 decimal place. Payback period years

The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash Year 1 Investment $ 68,000 $8,000 Cash Inflow $7,000 $ 14,000 2 3 $ 21,000 4 5 6 7 8 9 10 $ 22,000 $ 25,000 $ 23,000 $ 21,000 $ 19,000 $ 18,000 $ 18,000 Required: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large? Complete this question by entering your answers in the tabs below. Saved Required 1 Required 2 Determine the payback period of the investment. Note: Round your answer to 1 decimal place. Payback period years

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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Following is information on two alternative investments being considered by Jolee Company. The company requires a 12% return from its investments. Project A Project B Initial investment $ (187,325 ) $ (156,960 ) Expected net cash flows in: Year 1 55,000 35,000 Year 2 49,000 48,000 Year 3 79,295 55,000 Year 4 95,400 66,000 Year 5 55,000 27,000 a. For each alternative project compute the net present value.b. For each alternative project compute the profitability index. If the company can only select one project, which should it choose?
EconomicS 2. Referring to the given data in 6.7/317 at the end of Chapter 6 (Engineering Economy by Sullivan et al), select the best alternative using: (a) PW (b) AW © FW (d) IRR 6-7. Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given next. The MARR is 20% per year. At the conclusion of the useful life, the investment will be sold. A в $28,000 $55,000 $40,000 Annual expenses $15,000 $13,000 $22,000 Annual revenues $23,000 $28,000 $32,000 $6,000 $8,000 $10,000 Investment cost Market value Useful life 10 years 10 years 10 years 26.4% 24.7% 22.4% IRR A decision-maker can select one of these alternatives or decide to select none of them. Make a recommendation using the PW method. (6.4)
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The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year Investment Cash Inflow 5 123456 $ 60,000 $ 4,000 $ 3,000 $ 8,000 3 $ 16,000 $ 17,000 $ 20,000 $ 18,000 7 $ 16,000 68 8 $ 14,000 9 $ 13,000 10 $ 13,000 Required: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the payback period of the investment. (Round your answer to 1 decimal place.) Payback period years
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