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Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below Project Soup Initial investment $400,000 Annual net income. $30,000 Net
Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below Project Soup Initial investment $400,000 Annual net income. $30,000 Net annual cash inflow $110,000 Estimated useful life 5 years Salvage Value. 0 Project Nuts Initial investment. $60,000 Annual net income $46,009 Net annual cash inflow $146,000 Estimated Useful life. 6 years Salvage Value The company requires a 10% return on all investments. Present Value of an Annuity of 1 Period 5. 9%. 3.890 10% 3.791 11%. 3.696 12%. 3.605 Period 6 9%. 4.486 10%. 4.355 11%. 4.231 12%. 4.111 The net present value for project nuts is
Project Soup
Initial investment $400,000
Annual net income. $30,000
Net annual cash inflow $110,000
Estimated useful life 5 years
Salvage Value. 0
Project Nuts
Initial investment. $60,000
Annual net income $46,009
Net annual cash inflow $146,000
Estimated Useful life. 6 years
Salvage Value
The company requires a 10% return on all investments.
Present Value of an Annuity of 1
Period 5.
9%. 3.890
10% 3.791
11%. 3.696
12%. 3.605
Period 6
9%. 4.486
10%. 4.355
11%. 4.231
12%. 4.111
The net present value for project nuts is
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Coping With Financial Accounting 1 For Senior Secondary Schools And Undergraduate Studies
Authors: Festus Chukwunwendu Akpotohwo ,Stella Alfred-Jaja Wellington-Igonibo ,Cletus Ogeibiri
1st Edition
3659611034, 978-3659611032
