Question
Q35. Cullumber Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $300000 $480000 Annual
Q35. Cullumber Company is considering two capital investment proposals. Estimates regarding each project are provided below:
| Project Soup | Project Nuts | |||
| Initial investment | $300000 | $480000 | ||
| Annual net income | 30000 | 46000 | ||
| Net annual cash inflow | 110000 | 146000 | ||
| Estimated useful life | 5 years | 6 years | ||
| Salvage value | 0 | 0 |
The company requires a 10% rate of return on all new investments.
| Present Value of an Annuity of 1 | ||||
| Periods | 9% | 10% | 11% | 12% |
| 5 | 3.89 | 3.791 | 3.696 | 3.605 |
| 6 | 4.486 | 4.355 | 4.231 | 4.111 |
The cash payback period for Project Nuts is
6.86 years.
3.29 years.
3.75 years.
10.00 years.
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Plant Auditing A Powerful Tool For Improving Metallurgical Plant Performance
Authors: Deepak Malhotra
1st Edition
0873354125, 978-0873354127
