Question
Blossom Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as
Blossom Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows.
Project Bono | Project Edge | Project Clayton | |||||
---|---|---|---|---|---|---|---|
Capital investment | $164,800 | $180,250 | $206,000 | ||||
Annual net income: | |||||||
Year 1 | 14,420 | 18,540 | 27,810 | ||||
2 | 14,420 | 17,510 | 23,690 | ||||
3 | 14,420 | 16,480 | 21,630 | ||||
4 | 14,420 | 12,360 | 13,390 | ||||
5 | 14,420 | 9,270 | 12,360 | ||||
Total | $72,100 | $74,160 | $98,880 |
Depreciation is computed by the straight-line method with no salvage value. The companys cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) Click here to view PV table.
(a)
Correct answer iconYour answer is correct.
Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.)
Project Bono | enter the cash payback period in years rounded to 2 decimal places | Answer-- 3.48 years | |
---|---|---|---|
Project Edge | enter the cash payback period in years rounded to 2 decimal places | Answer -- 3.40 years | |
Project Clayton | enter the cash payback period in years rounded to 2 decimal places | Anawer 3.16 years |
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Attempts: 2 of 5 used
(b)
New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.
Compute the net present value for each project. (Round answers to 0 decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
Project Bono | Project Edge | Project Clayton | |||||
---|---|---|---|---|---|---|---|
Net present value | $enter a dollar amount rounded to 0 decimal places | $enter a dollar amount rounded to 0 decimal places | $enter a dollar amount rounded to 0 decimal places |
A part is done already need answer for part B
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