Question
Carlos Machines is considering two investment proposals, Investment A and Investment B. An analysis of these two investments has provided the following: Investment A Investment
Carlos Machines is considering two investment proposals, Investment A and Investment B. An analysis of these two investments has provided the following:
| Investment A | Investment B | |||
|---|---|---|---|---|
| Annual operating cash flows | $100,000 | $120,000 | ||
| Payback periods | 3.3 years | 3.0 years | ||
| NPV | ($10,000) | $15,000 |
The hurdle rate is 7%. Given the data, which investment(s) should be undertaken if the company has sufficient funds to invest in both?
A. Investment B only.
B. Neither investment should be undertaken.
C. Both investments.
D. Investment A only.
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Monitoring And Auditing Practices For Effective Compliance
Authors: John E. Steiner
2nd Edition
0977843017, 978-0977843015
