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

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Whispering Winds Company is considering two capital investment proposals. Estimates regarding each project are provided below:
Project Soup
Project Nuts
$400000
$600000
44000
Initial investment
Annual net income
Net annual cash
inflow
Estimated useful life
Salvage value
Periods
5
6
28000
106000
O 53.0%
O 26.5%
O 7.0%
5 years
14.0%
0
The company requires a 10% rate of return on all new investments.
Present Value of an Annuity of 1
9% 10% 11%
12%
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
130000
6 years
0
Transcribed Image Text:Whispering Winds Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts $400000 $600000 44000 Initial investment Annual net income Net annual cash inflow Estimated useful life Salvage value Periods 5 6 28000 106000 O 53.0% O 26.5% O 7.0% 5 years 14.0% 0 The company requires a 10% rate of return on all new investments. Present Value of an Annuity of 1 9% 10% 11% 12% 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 130000 6 years 0
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