Whispering Winds Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts $400000 $600000 Initial investment Annual net income Net annual cash inflow Estimated useful life Salvage value 28000 6 106000 5 years O53.0 % O 26.5% 07.0% O 14.0% 0 Present Value of an Annuity of 1 Periods 9% 10% 11% 12% 5 3.890 3.791 3.696 3.605 4.486 4.355 4.231 4.111 The annual rate of return for Project Soup is 44000 The company requires a 10% rate of return on all new investments. 130000 6 years 0
Whispering Winds Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts $400000 $600000 Initial investment Annual net income Net annual cash inflow Estimated useful life Salvage value 28000 6 106000 5 years O53.0 % O 26.5% 07.0% O 14.0% 0 Present Value of an Annuity of 1 Periods 9% 10% 11% 12% 5 3.890 3.791 3.696 3.605 4.486 4.355 4.231 4.111 The annual rate of return for Project Soup is 44000 The company requires a 10% rate of return on all new investments. 130000 6 years 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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