Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please someone help. this is my second time posting this because the first guy got it wrong. anything helps. opecky Industries Inc. is considering allocating

please someone help. this is my second time posting this because the first guy got it wrong. anything helps.
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
opecky Industries Inc. is considering allocating a limited amount of capital investment funds among four proposals. The amount of proposed investment, estimated ncome from operations, and net cash flow for each proposal are as follows: The company's copital rationing policy requires a maximum cash paybock period of three years. In addition, a minimum average rate of return of 20% is reguired on all projects. If the preceding standards are met, the net present yalue method and present value indexes are used to rank the remaining proposals. Required: 1. Compute the cash payback period for each of the four proposals. Assume that net cash flows are uniform throughout the year. 2. Giving effect to straight-line depreciation on the investments and assuming no estimated residual value, compute the average rate of return for each of the four proposals, Round to one decimal place. 4. For the proposals accepted foe further analysis in part (3), compute the net present value, Use a rate of 12% and the present value of 51 table above. If required, use the minus sign to indicate a subtraction or negative net present value. 5. Compute the present value index for each of the proposals in part (4). Round to two decimal places. 6. Rank the proposals from most attractive to least attractive, based on the present values of net cash flows computed in part (4). Rank 1st Rank 2nd 7. Rank the proposals from most attractive to least attractive, based on the present value indexes computed in part (5). Rank ist Rank 2nd 8. Based on your calculations above, complete the statements below. Looking at the present value computations, has the larger net present value. is attractive in terms of amount of present value per dollar invested. Comparing the two proposals, their present value indices have a significant difference . Lastly, has the larger initial investment. Considering all this informotion, Kopecky should proceed with

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Cost Accounting

Authors: Edward J. Vanderbeck

12th Edition

0324100949, 978-0324100945

More Books

Students also viewed these Accounting questions

Question

Why is a counteroffer a form of rejecting an offer?

Answered: 1 week ago

Question

How does the system interface with customers? Lop74

Answered: 1 week ago

Question

In what ways do personal and social media change how we think?

Answered: 1 week ago

Question

How do virtual communities diff er from physical communities?

Answered: 1 week ago