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If Done right I will rate ! 6 Information on four investment proposals is given below: Investment Proposal 4 points Investment required Present value of
If Done right I will rate !
6 Information on four investment proposals is given below: Investment Proposal 4 points Investment required Present value of cash inflows Net present value Life of the project $ (430,000) $(50,000) $(50,000) $(1,820,000) 2,429,200 $. 201,600 $. 20,500 $. 26,800 $. 609,200 6 years 70,500 76,800 631,600 5 years years 6 years eBook Required 1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference Hint Project Investment Profitability Preference Rank Print Proposal Index References A piece of labor-saving equipment has just come onto the market that Mitsui Electronics, Ltd., could use to reduce costs in one of its plants in Japan. Relevant data relating to the equipment follow Purchase cost of the equipment Annual cost savings that will be $448,000 $80,000 10 years provided by the equipment Life of the equipment Required: 1a. Compute the payback period for the equipment 1b. If the company requires a payback period of four years or less, would the equipment be purchased? 2a. Compute the simple rate of return on the equipment. Use straight-line depreciation based on the equipment's useful life. 2b. would the equipment be purchased if the company's required rate of return is 13%? Complete this question by entering your answers in the tabs below Req 1A Req 1B Req 2A Req 2B Compute the payback period for the equipment. (Round your answer to 1 decimal place.) Payback period years Req 1A A piece of labor-saving equipment has just come onto the market that Mitsui Electronics, Ltd., could use to reduce costs in one of plants in Japan. Relevant data relating to the equipment follow: Purchase cost of the equipment Annual cost savings that will be $448,00e 80,000 10 years provided by the equipment Life of the equipment Required: 1a. Compute the payback period for the equipment. 1b. If the company requires a payback period of four years or less, would the equipment be purchased? 2a. Compute the simple rate of return on the equipment. Use straight-ine depreciation based on the equipment's useful life. 2b. Would the equipment be purchased if the company's required rate of return is 13%? Complete this question by entering your answers in the tabs below Req 1A Req 1B Req 2A Req 2B Compute the simple rate of return on the equipment. Use straight-line depreciation based on the equipment's useful life. (Round your answer to 1 decimal place ie. 0.123 should be considered as 12.3%. Simple rate of return KReq 1B Req 2B>Step by Step Solution
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