Question
A company has a decision to make between two investment alternatives. The company requires a 10% return on investment. Predicted data is provided below: Projected
A company has a decision to make between two investment alternatives. The company requires a 10% return on investment. Predicted data is provided below:
Projected after-tax net income Investment Y: 40,000 Invesmtne Z: 43,000
Investment Costs: Investment Y: 600,000 Investment Z: 672,000
Estimated Life: Investment Y: 6 Years Investment Z: 6 Years
Present value of an annuity for 6 years at 10% is 4.3553. This company uses straight-line depreciation. Required: a. Calculate the net present value for each investment b. Calculate payback for each investment C. Which investment should this company select, explain? D. What is the annual cash flow?
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Bookkeeping And Accounting
Authors: Greg Shields
1st Edition
1983673536, 978-1983673535
