Year 1 2 $ 3 $ 99 A $ 4 $ Total $ Cash layout $ Sacharrin 280,000 $ 280,000 $ 280,000 $ 280,000 $ 1,120,000 $ 887,600 $ Sucralose 370.000 150,000 275,000 325,000 1,120,000 911,100

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
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Se.126.

Year
1 $
2
$
3
$
4
$
Total
$
Cash layout $
Sacharrin
Sucralose
280,000 $
280,000 $
280,000 $
280,000 $
1,120,000 $1,120,000
887,600 $
911,100
370,000
150,000
275,000
325,000
Transcribed Image Text:Year 1 $ 2 $ 3 $ 4 $ Total $ Cash layout $ Sacharrin Sucralose 280,000 $ 280,000 $ 280,000 $ 280,000 $ 1,120,000 $1,120,000 887,600 $ 911,100 370,000 150,000 275,000 325,000
Compute the payback period, net present value, and internal
rate of return for each process. Use a rate of 10% and the
present value of an annuity of $1 table. Finally, state which
project should you use and why? What advantage does the
internal rate of return method have over the net present value
method in comparing projects?
Year
0
1
2
3
4
B
9 Total
0 Cash layout
1 Payback Period
2 Net Present Value
Y
3 Internal Rate of Return
34
Sacharrin
Sucralose
Transcribed Image Text:Compute the payback period, net present value, and internal rate of return for each process. Use a rate of 10% and the present value of an annuity of $1 table. Finally, state which project should you use and why? What advantage does the internal rate of return method have over the net present value method in comparing projects? Year 0 1 2 3 4 B 9 Total 0 Cash layout 1 Payback Period 2 Net Present Value Y 3 Internal Rate of Return 34 Sacharrin Sucralose
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