Question
Gordon Manufacturing is considering following two investment proposals: Proposal X Proposal Y Investment $736,000 $504,000 Useful life 5 years 4 years Estimated annual net cash
Gordon Manufacturing is considering following two investment proposals:
|
| Proposal X | Proposal Y |
| Investment | $736,000 | $504,000 |
| Useful life | 5 years | 4 years |
| Estimated annual net cash inflows received at the end of each year | $152,000 | $108,000 |
| Residual value | $64,000 | $0 |
| Depreciation method | Straight-line | Straight-line |
| Annual discount rate | 10% | 9% |
Compute the present value of the future cash inflows from Proposal X.
| a | $576,232 |
| b | $615,976 |
| c | $664,516 |
| d | $752,238 |
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Financial Forensics Body Of Knowledge
Authors: Darrell D. Dorrell, Gregory A. Gadawski
1st Edition
0470880856, 978-0470880852
