Question
Rosco Manufacturing Company is considering three new projects, each requiring an equipment investment of $20,000. Each project will last for 3 years and produce the
Rosco Manufacturing Company is considering three new projects, each requiring an equipment investment of $20,000. Each project will last for 3 years and produce the following cash inflows. Year 1 2 14,000 MA $ 7,000 9.000 BB $9,600 CC $11,000 9,600 10,000 9,600 Total $31,000 $28,800 9,000 $30,000 The equipment's salvage value is zero. Ronco uses straight-line depreciation. Rosco will not accept any project with a payback period over 2 years. Instructionm Compute the Net Present Value for the different projects assuming a discount rate of 5% and decide which project to accept and which one to reject
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