Number 5

Use the following to answer question 5: Carr Company is considering two capital investment proposals. Estimates regarding each pro are provided below: $400,000 30,000 110,000 5 years ut $600,000 46,000 146,000 6 years Initial investment Annual net income Net annual cash inflow Estimated useful life Salvage value The company requires a 10% rate of return on all new investments. Periods 9% 10% 11% 12% Present Value of an Annuity of 1 3.890 3.791 3.696 4.486 4.355 4.231 3.605 5. The cash payback period for Project Nuts is A) 6.7 years. B) 4.1 years C) 13.3 years. D) 5.0 years. 6. A company is considering the following alternatives: Alternative1 Alternative2 Revenues Variable costs Fixed costs Which of the following are relevant in choosing between the alternatives A) Variable costs and fixed costs B) Variable costs $120,000 $120,000 60,000 35,000 70,000 35,000 C) Revenues