Homework Answers
| Doug's custom construction company | |||
| Answer :- part a | |||
| Cash payback period = 2 years + ( 7080 /14160 ) = 2.5 years | |||
| Project AA | |||
| Initial Invstmt. | Annual net cash inflow | Unrecovered investment | |
| 1 | 25960 | 8260 | 17700 |
| 2 | 10620 | 7080 | |
| 3 | 14160 | ||
| 33040 | |||
| Cash payback period = 2 years + ( 2360 / 11800 ) = 2.20 years | |||
| Project BB | |||
| Initial Invstmt. | Annual net cash inflow | Unrecovered investment | |
| 1 | 25960 | 11800 | 14160 |
| 2 | 11800 | 2360 | |
| 3 | 11800 | ||
| 35400 | |||
| Cash payback period = 1 year + ( 10620 / 14160 ) = 1.75 years | |||
| Project CC | |||
| Initial Invstmt. | Annual net cash inflow | Unrecovered investment | |
| 1 | 25960 | 15340 | 10620 |
| 2 | 14160 | ||
| 3 | 12980 | ||
| 42480 | |||
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Doug's Custom Construction Company is considering three new projects, each requiring an equipment investment of $25,960....
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Doug’s Custom Construction Company is considering three new projects, each requiring an equipment investment of $23,320....
Doug’s Custom Construction Company is considering three new
projects, each requiring an equipment investment of $23,320. Each
project will last for 3 years and produce the following net annual
cash flows.
The equipment’s salvage value is zero, and Doug uses
straight-line depreciation. Doug will not accept any project with a
cash payback period over 2 years. Doug’s required rate of return is
12%.
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Doug’s Custom Construction Company is considering three new
projects, each requiring an equipment investment of $23,320. Each
project will last for 3 years and produce the following net annual
cash flows.
The equipment’s salvage value is zero, and Doug uses
straight-line depreciation. Doug will not accept any project with a
cash payback period over 2 years. Doug’s required rate of return is
12%.
Doug's Custom Construction Company is considering three new projects, each requiring an equipment investment of $23,320. Each...
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