Homework Answers
CALCULATE PAYBACK PERIOD :
PAYBACK PERIOD = INTIAL INVESTMENT/ANNUAL CASH FLOW
PROJECT AA = 2 YEAR+6000/15000 = 2.4 YEARS
PROJECT BB = 22000/9500 = 2.32 YEARS
PROJECT CC = 2 YEAR+1000/9000 = 2.11 YEARS
MOST DESIREABLE PROJECT IS PROJECT CC
LEASE DESIRABLE PROJECT IS PROJECT AA
BUT ACCORDING TO COMPANY'S POLICY THERE SHOULD NOT ACCEPTED ANY PROJECT BECAUSE ALL PROJECT'S PAYBACK IS OVER 2 YEARS
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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%.
Doug's Custom Construction Company is considering three new projects, each requiring an equipment investment of $23,320. Each...
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Bramble's Custom Construction Company is considering three new projects, each requiring an equipment investment of $26,840....
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Doug's Custom Construction Company is considering three new projects, each requiring an equipment investment of $25,960. Each project will last for 3 years and produce the following net annual cash flows. Year 1 2 3 Total AA $8,260 10,620 14,160 $33,040 BB $11,800 11,800 11,800 $35,400 CC $15,340 14,160 12,980 $42,480 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...
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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...
Bramble's Custom Construction Company is considering three new projects, each requiring an equipment investment of $26,840. Each project will last for 3 years and produce the following net annual cash flows. Year 1 2 3 Total AA $8,540 10,980 14,640 $34,160 BB $12,200 12,200 12,200 $36,600 CC $15,860 14,640 13,420 $43,920 The equipment's salvage value is zero, and Bramble uses straight-line depreciation. Bramble will not accept any project with a cash payback period over 2 years. Bramble's required rate of...
Bramble's Custom Construction Company is considering three new projects, each requiring an equipment investment of $26,840. Each project will last for 3 years and produce the following net annual cash flows. Year - 2 AA $8,540 10,980 14,640 $34,160 BB $12,200 12,200 12,200 $36,600 CC $15,860 14,640 13,420 $43,920 Total The equipment's salvage value is zero, and Bramble uses straight-line depreciation. Bramble will not accept any project with a cash payback period over 2 years. Bramble's required rate of return...
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