Question
If Interstate Appliance has a 12% cost of capital, what decision should be made regarding the projects above? A. accept plan A B. accept plan
If Interstate Appliance has a 12% cost of capital, what decision should be made regarding the projects above?
A. accept plan A B. accept plan B C. accept plan C D. accept Palns, A, B, and C
Plan A ---------------------------------------- Plan B ----------------------------------------- Plan C
Initial outlay = $3,600,000---------Initial outlay = $6,000,000------------Initial outlay = $3,500,000
Cash Flow: ------------------------------Cash Flow -------------------------------------Cash Flow
Yr1=$-0- -----------------------------Yr 1=$4,000,000 -----------------------------Yr 1=$2,000,000
Yr 2= -0- -----------------------------Yr 2=$3,000,000 ---------------------------- Yr 2= -0-
Yr 3= -0- ------------------------------Yr 3 =$2,000,000----------------------------Yr 3= $2,000,000
Yr 4 = -0- ------------------------------ Yr 4= -0- --------------------------------------Yr 4=$2,000,000
Yr 5=$7,000,000 ----------------------Yr 5= -0- --------------------------------------Yr 5=$2,000,000
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The Only Tax Audit Guide Youll Ever Need
Authors: Janet M. Sydlaske, Richard K. Millcroft
1st Edition
0471510769, 978-0471510765
