Question
Rank the following investments for renate company in order of their desirability using the a) Payback period method B) Net present value method and C)
Rank the following investments for renate company in order of their desirability using the a) Payback period method B) Net present value method and C) Time-adjusted rate of return method. Management requires a minimum rate of return of 14%.
| Investment Initial | Cash Outlay | Expected after-tax net cash inflow per year | Expected life of proposal (Years) |
| A | $120,000 | $15,000 | 8 |
| B | $150,000 | $26,000 | 20 |
| C | $240,000 | $48,000 | 10 |
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Financial Accounting Group
Authors: Ilse Lubbe, Shelley Herbert, Goolam Modack
1st Edition
0195998634, 9780195998634
