Question
heffields Custom Construction Company is considering three new projects, each requiring an equipment investment of $25,520. Each project will last for 3 years and produce
heffields Custom Construction Company is considering three new projects, each requiring an equipment investment of $25,520. Each project will last for 3 years and produce the following net annual cash flows.
| Year | AA | BB | CC | ||||
| 1 | $8,120 | $11,600 | $15,080 | ||||
| 2 | Unresolved | 11,600 | 13,920 | ||||
| 3 | 13,920 | 11,600 | 12,760 | ||||
| Total | $32,480 | $34,800 | $41,760 |
The equipments salvage value is zero, and Sheffield uses straight-line depreciation. Sheffield will not accept any project with a cash payback period over 2 years. Sheffields required rate of return is 12%. Click here to view PV table.
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
16th edition
978-1259277160
