Computation of Cash Payback Period |
Cash Payback Period = 2+ 15100/36000 |
Cash Payback Period = 2.42 Years |
Working | ||
Year | Cash Flow | Cummulative Cash Flow |
0 | -$104,700 | -$104,700 |
1 | $44,600 | -$60,100 |
2 | $39,200 | -$20,900 |
3 | $36,000 | $15,100 |
4 | $30,800 | $45,900 |
5 | $24,200 | $70,100 |
b)Computation of Annual Rate of Return |
Annual Rate of Return for the investment = Average Net Income /Average Investment |
Annual Rate of Return for the investment = 14020/52350= 26.78% |
Working |
Average Net Income = (9400+10700+16900+17900+15200)/5= $14020 |
Average Investment = (104700+0)/2= $52350 |
Year | Cash Flow | PV factor @ 11% | Present Value of Cash Flow |
[a] | [b] | [c = a*b] | |
0 | -$104,700 | 1 | -$104,700 |
1 | $44,600 | 0.9009 | $40,180 |
2 | $39,200 | 0.81162 | $31,816 |
3 | $36,000 | 0.73119 | $26,323 |
4 | $30,800 | 0.65873 | $20,289 |
5 | $24,200 | 0.59345 | $14,361 |
Total | $28,269 | ||
Hence, NPV will be : $28269 |
x Your answer is incorrect. Try again. Drake Corporation is reviewing an investment proposal. The initial...
Drake Corporation is reviewing an investment proposal. The initial cost and estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is equal to its book value. There would be...
Exercise 26-11 Drake Corporation is reviewing an investment proposal. The initial cost and estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is equal to its book value. There...
Drake Corporation is reviewing an investment proposal. The initial cost and estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is equal to its book value. There would be...
Drake Corporation is reviewing an investment proposal. The initial cost and estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is equal to its book value. There would be...
Drake Corporation is reviewing an investment proposal. The initial cost is $103,400. Estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is assumed to equal its book value. There...
Question 6 Drake Corporation is reviewing an investment proposal. The initial cost is $103,100. Estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is assumed to equal its book...
Exercise 24-11 Drake Corporation is reviewing an investment proposal. The initial cost and estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. Al cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is equal to its book value. There...
ses/35333/assignments/3691185?module_item_id=11817967 Drake Corporation is reviewing an investment proposal. The initial cost is $106,000. Estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is assumed to equal its book value....
e12.11 t Drake Corporation is reviewing an investment proposal The initial cost is $107,100. Estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is assumed to equal its bookvalue....
Drake Corporation is reviewing an investment proposal. The initial cost is $105,800. Estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is assumed to equal its book value. There...