Given Information | ||||||||
Project A Cost | 510631 | |||||||
Life Of Project A | 12 Year | |||||||
Increase in Net Annual Cashflow from Project A | 74300 | |||||||
Project B Cost | 329590 | |||||||
Life Of Project B | 12 Year | |||||||
Increase in Net Annual Cashflow from Project B | 49600 | |||||||
Discount rate | 8% | |||||||
Year | Particular | Project A (x) | Project B (y) | Present Value Factor @8% (z) | Present Value of Project A (x * z) | Present Value of Project B (y* z) | ||
1 | Increase in Net Annual Cashflow | $ 74,300.00 | $ 49,600.00 | 0.9259 | $ 68,796.30 | $ 45,925.93 | ||
2 | Increase in Net Annual Cashflow | $ 74,300.00 | $ 49,600.00 | 0.8573 | $ 63,700.27 | $ 42,524.01 | ||
3 | Increase in Net Annual Cashflow | $ 74,300.00 | $ 49,600.00 | 0.7938 | $ 58,981.74 | $ 39,374.08 | ||
4 | Increase in Net Annual Cashflow | $ 74,300.00 | $ 49,600.00 | 0.7350 | $ 54,612.72 | $ 36,457.48 | ||
5 | Increase in Net Annual Cashflow | $ 74,300.00 | $ 49,600.00 | 0.6806 | $ 50,567.33 | $ 33,756.93 | ||
6 | Increase in Net Annual Cashflow | $ 74,300.00 | $ 49,600.00 | 0.6302 | $ 46,821.60 | $ 31,256.41 | ||
7 | Increase in Net Annual Cashflow | $ 74,300.00 | $ 49,600.00 | 0.5835 | $ 43,353.34 | $ 28,941.12 | ||
8 | Increase in Net Annual Cashflow | $ 74,300.00 | $ 49,600.00 | 0.5403 | $ 40,141.98 | $ 26,797.34 | ||
9 | Increase in Net Annual Cashflow | $ 74,300.00 | $ 49,600.00 | 0.5002 | $ 37,168.50 | $ 24,812.35 | ||
10 | Increase in Net Annual Cashflow | $ 74,300.00 | $ 49,600.00 | 0.4632 | $ 34,415.28 | $ 22,974.40 | ||
11 | Increase in Net Annual Cashflow | $ 74,300.00 | $ 49,600.00 | 0.4289 | $ 31,866.00 | $ 21,272.59 | ||
12 | Increase in Net Annual Cashflow | $ 74,300.00 | $ 49,600.00 | 0.3971 | $ 29,505.55 | $ 19,696.84 | ||
Pv Of Cash inflow (a) | $ 5,59,930.60 | $ 3,73,789.47 | ||||||
PV of cash Outflow (b) | $ 5,10,631.00 | $ 3,29,590.00 | ||||||
Net Present Value (a-b) | $ 49,300 | $ 44,199 | ||||||
Profitability index (a/b) | 1.10 | 1.13 | ||||||
Answer | ||||||||
Net Present Value - Project A | $ 49,300 | |||||||
Profitability Index - Project A | 1.10 | |||||||
Net Present Value - Project B | $ 44,199 | |||||||
Profitability Index - Project B | 1.13 | |||||||
Based on NPV Project A should
be Accepted , as NPV is higher than Project B
Based on Profitability Index Project B should be Accepted , as
Profitability Index is greater than Project A
Weygandt, Managerial Accounting, 7e W PLUS: the Male Contact Introductory Managerial Accounting (ACET 2101 - Assignment...
Wiley S tele Contact Us Louw PLUS PLUS Weygandt, Managerial Accounting, Be MANAGERIAL ACCOUNTING (ACCT 2120) tudy Practice Assignment Gradebook ORION Downloadable eTextbook en Assignment CALCULATOR FULL SCREEN PRINTER VERSION BACK NEXT SOURCES Brief Exercise 12-5 Mcknight Company is considering two different, mutually exclusive capital expenditure proposals. Project Awill cost $411,000, has an expected useful life of 11 years, a salvage value of zero, and is expected to increasenetannual cash flows by $ 71,000. Project will cost $273,000, has an...
Question 3 McKnight Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $542,000, has an expected useful life of 12 years, a salvage value of zero, and is expected to increase net annual cash flows by $74,500. Project B will cost $338,000, has an expected useful life of 12 years, a salvage value of zero, and is expected to increase net annual cash flows by $48,000. A discount rate of 7% is appropriate for both...
Brief Exercise 26-5 McKnight Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $450,241, has an expected useful life of 11 years, a salvage value of zero, and is expected to increase net annual cash flows by $73,500. Project B will cost $298,321, has an expected useful life of 11 years, a salvage value of zero, and is expected to increase net annual cash flows by $50,200. A discount rate of 9% is appropriate for...
McKnight Company is considering two different, mutually exclusive capital expenditure proposals. Profect A will cost $508,824, has an expected useful life of 12 years, a salvage value of zero, and is expected to increase net annual cash flows by $74,100. Project B will cost $341,779, has an expected useful life of 12 years, a salvage value of zero, and is expected to increase net annual cash flows by $50,700. A discount rate of 8% is appropriate for both projects. Compute...
McKnight Company is considering two different, mutually
exclusive capital expenditure proposals. Project A will cost
$509,000, has an expected useful life of 12 years, a salvage value
of zero, and is expected to increase net annual cash flows by
$74,100. Project B will cost $342,000, has an expected useful life
of 12 years, a salvage value of zero, and is expected to increase
net annual cash flows by $50,700. A discount rate of 8% is
appropriate for both projects.
Compute...
32642627 module_item_id-10676032 Support < Prev Next > --/2.5 Question 2 View Policies Current Attempt in Progress Mcknight Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $435,000, has an expected useful life of 11 years, a salvage value of zero, and is expected to increase net annual cash flows by $74.600 Project will cost $253.000, has an expected useful life of 11 years, a salvage value of zero, and is expected to increase net annual...
Vaughn Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $506,000, has an expected useful life of 12 years, a salvage value of zero, and is expected to increase net annual cash flows by $69,900. Project B will cost $314,000, has an expected useful life of 12 years, a salvage value of zero, and is expected to increase net annual cash flows by $45,200. A discount rate of 7% is appropriate for both projects. Click...
McKnight Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $459,000, has an expected useful life of 11 years, a salvage value of zero, and is expected to increase net annual cash flows by $74,600. Project B will cost $274,000, has an expected useful life of 11 years, a salvage value of zero, and is expected to increase net annual cash flows by $46,200. A discount rate of 9% is appropriate for both projects Net...
McKnight Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $464,000, has an expected useful life of 12 years, a salvage value of zero, and is expected to increase net annual cash flows by $68,100. Project B will cost $342,000, has an expected useful life of 12 years, a salvage value of zero, and is expected to increase net annual cash flows by $50,900. A discount rate of 8% is appropriate for both projects. Click...
McKnight Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $592,821, has an expected useful life of 15 years, a salvage value of zero, and is expected to increase net annual cash flows by $75,000. Project B will cost $396,957, has an expected useful life of 15 years, a salvage value of zero, and is expected to increase net annual cash flows by $51,400. A discount rate of 8% is appropriate for both projects. Click...