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Please answer both questions. The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Investment $71,000 $
Please answer both questions.
The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Investment $71,000 $ 4,000 Year 1 2 3 4 5 6 7 8 9 10 Cash Inflow $ 6,000 $12,000 $21,000 $22,000 $25,000 $23,000 $21,000 $19,000 $18,000 $18,000 Required: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the payback period of the investment. (Round your answer to 1 decimal place.) Payback period years Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project Investment Proposal A B D $(118,000) $(128,000) $(98,000) $(162,000) 153,400 204,800 142,100 226,800 $ 35,400 $ 76,800 $ 44,100 $ 64,800 5 years 7 years 6 years 6 years 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. Investment Pr sal Project Profitability Index Rank Preference A B C DStep by Step Solution
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