Rogers Kaepernick 30,000 S 15,000 Capital Project Options: Brady Investment required = $ 20,000S Annual net cash flow Year 1 10,000 Year 2 8,000 Year 3 8,000 Year 4 4.000 Year 5 5000 Total cash flow for 5 yrs 35.000 SI Usefule life in years "Hurdle rate" (cost of capital) 20.00% Estimated Salvage Value $ 5.000 $ Average annual cash flow $ 7 000 00$ Payback Period 2.25 Accounting rate of return 25.60% Internal rate of return 30.45% Net Present Value $4,466 Profitability Index 1.2233 8.000 9,000 10,000 8,000 6.000 41,000 $ 5 20.00% 10,000 $ 8200.00 $ 6.000 6,000 10.000 10,000 4000 36,000 5 20.00% 12 000 7.200,00 20% Which project should be eliminated? Which project would you select if you needed your money returned ASAP? The Accounting Rate of Return 'Overstates' actual cash flow for which project? The Accounting Rate of Return 'Understates' actual cash flow for which project? Which project would you select to maximize the profit return