Question
There are four projects (Potential Jobs) and you are tasked with analyzing to see in which order should we fund the projects. Name (Potential Job):
There are four projects (Potential Jobs) and you are tasked with analyzing to see in which order should we fund the projects.
| Name (Potential Job): | Job Z |
| Purchase Price: | $50,000 |
| Salvage Value: | $0 |
| Recovery Period (3,5,7,15,20 yrs): | 15 |
| Asset Life (2-20 yrs): | 17 |
| Expensing ($10,000 maximum): | $7,000 |
| Income Tax Rate: | 22.00% |
| Percent Financed by Loan: | 82.00% |
| Loan Interest Rate: | 6.00% |
| Loan Length (years): | 7 |
| Opportunity Cost: | 5.00% |
| Cash Income: | $5,000 |
| Cash Expenses: | $1,600 |
| Inflation Rate: | 2.00% |
| Name (Potential Job): | Job A |
| Purchase Price: | $24,800 |
| Salvage Value: | $1,000 |
| Recovery Period (3,5,7,15,20 yrs): | 5 |
| Asset Life (2-20 yrs): | 20 |
| Expensing ($10,000 maximum): | $5,000 |
| Income Tax Rate: | 28.00% |
| Percent Financed by Loan: | 66.00% |
| Loan Interest Rate: | 7.00% |
| Loan Length (years): | 5 |
| Opportunity Cost: | 5.00% |
| Cash Income: | $10,000 |
| Cash Expenses: | $1,600 |
| Inflation Rate: | 5.00% |
| Name (Potential Job): | Job P |
| Purchase Price: | $36,000 |
| Salvage Value: | $5,000 |
| Recovery Period (3,5,7,15,20 yrs): | 3 |
| Asset Life (2-20 yrs): | 15 |
| Expensing ($10,000 maximum): | $7,000 |
| Income Tax Rate: | 26.00% |
| Percent Financed by Loan: | 75.00% |
| Loan Interest Rate: | 10.00% |
| Loan Length (years): | 6 |
| Opportunity Cost: | 6.00% |
| Cash Income: | $5000 |
| Cash Expenses: | $1,600 |
| Inflation Rate: | 4.00% |
| Name (Potential Job): | Job F |
| Purchase Price: | $24,000 |
| Salvage Value: | $2,000 |
| Recovery Period (3,5,7,15,20 yrs): | 7 |
| Asset Life (2-20 yrs): | 10 |
| Expensing ($10,000 maximum): | $10,000 |
| Income Tax Rate: | 28.00% |
| Percent Financed by Loan: | 75.00% |
| Loan Interest Rate: | 9.00% |
| Loan Length (years): | 5 |
| Opportunity Cost: | 6.00% |
| Cash Income: | $15000 |
| Cash Expenses: | $1,240 |
| Inflation Rate: | 5.00% |
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Financial Accounting An Introduction to Concepts, Methods and Uses
Authors: Roman L. Weil, Katherine Schipper, Jennifer Francis
14th edition
978-1111823450, 1-133-36617-1 , 1111823456, 978-1-133-3661, 978-1133591023
