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e following investments for Renate Company in order of their desirability using the (a) payback period method, (b) net present value method, and (c) time-adjusted
e following investments for Renate Company in order of their desirability using the (a) payback period method, (b) net present value method, and (c) time-adjusted rate of return method. Management requires a minimum rate of return of 14 per cent.
| Initial | Expected after-tax net cash | Expected life of proposal |
Investment | Cash outlay | Inflow per year | (years) |
A | $ 120,000 | $ 15,000 | 8 |
B | 150,000 | 26,000 | 20 |
C | 240,000 | 48,000 | 10 |
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