Year Plant Expansion Retail Store Expansion $ 450,000 $ 500,000 1 450,000 | 400,000 3 340,000 350,000 4 280,000 250,000 180,000 200,000 Total s1,700,000 $1,700,000 2.
Year Plant Expansion Retail Store Expansion $ 450,000 $ 500,000 1 450,000 | 400,000 3 340,000 350,000 4 280,000 250,000 180,000 200,000 Total s1,700,000 $1,700,000 2.
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
Related questions
Question
Cash payback period,
Each project requires an investment of $900,000. A rate of 15% has been selected for the net present value analysis.
Instructions
1. Compute the following for each product:
a. Cash payback period.
b. The net present value. Use the present value of $1 table appearing in this chapter (Exhibit 2).
2. Prepare a brief report advising management on the relative merits of each project.
Transcribed Image Text:Year Plant Expansion Retail Store Expansion
$ 450,000
$ 500,000
1
450,000
| 400,000
3
340,000
350,000
4
280,000
250,000
180,000
200,000
Total s1,700,000
$1,700,000
2.
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