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Jonczyk Company is considering two different, mutually exclusive capital expenditure proposals. Project A Will cost expected useful life of 13 years and a salvage value
Jonczyk Company is considering two different, mutually exclusive capital expenditure proposals. Project A Will cost expected useful life of 13 years and a salvage value of zero, and is expected to increase net annual cash flows by $73,000. Project B will cost $311,000, has an expected useful life of 13 years and a salvage value of zero, and is expected to increase net annual cash flows by $51,000. A discount rate of 10% is appropriate for both projects. Click here to view PV table. Calculate the net present value and profitability index of each project. (If the net present value is negative, use either a negative sign preceding the number eg.-45 or parentheses eg. (45). Round present value answers to O decimal places, e.g. 125 and profitability index answers to 2 decimal places, eg. 15.52. For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124.) Project A Project B Net present value $ Profitability index Which project should be accepted based on net present value? should be accepted. Which project should be accepted based on profitability index? should be accepted. Jonczyk Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $466,000, has an expected useful life of 13 years and a salvage value of zero, and is expected to increase net annual cash flows by $73,000. Project B will cost $311,000, has an expected useful life of 13 years and a salvage value of zero, and is expected to increase net annual cash flows by $51,000. A discount rate of 10% Is appropriate for both projects. Click here to view PV table. Calculate the net present value and profitability index of each project. (If the net present value is negative, use either a negative sign preceding the number eg.-45 or parentheses eg (45). Round present value answers to 0 decimal places, eg. 125 and profitability index answers to 2 decimal places, eg. 15.52. For calculation purposes, use 5 decimal places as displayed in the factor table provided, eg. 1.25124) Net present value Project A Project B Profitability index Which project should be accepted based on net present value? should be accepted. Which project should be accepted based on profitability Index? should be accepted eTextbook and Media Save for Later Attempts: 0 of 3 used Submit
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