Question
A company is evaluating three different investments projecst as part of its planning efforts. Each of the three projects involves an investment of 325,000 and
A company is evaluating three different investments projecst as part of its planning efforts. Each of the three projects involves an investment of 325,000 and has no residual value. Manage is using an interest rate of 12% for analysis. Information on each project is as follow: Project A Invest in machineray to automate a manufacturing process. The investment will reduce operating cost as follow:
Year1 | Year 2 | Year 3 | Year 4 | Year 5 |
50,000 | 50,000 | 100,000 | 125,000 | 150,000 |
Project B Invested in alternative energy equipment using solar power sources and new battery storage technology. The project will reduce energy cost by 115,000 per year for 10 years, but will require annual maintainice cost of 45,000
Project C Invested in a CRM software system. The system will increase sales by 200,000 per year for the next 5 years. Operation expensises related to the increase sales are expected to be 110,000 per year.
What are the follwoing
Payback Period | Average Return of Rate | Net Present Value | |
Project A | |||
Project B | |||
Project C |
Show calculation
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