Description of this paper

capital investment proposals

Description

solution


Question

Carr Company is considering two capital investment proposals. Estimates regarding eac project are provide below;Project Soup Project Nuts;Initial investment $400,000 $600,000;Annual Net Income 20,000 42,000;Net annual cash inflow 100,000 142,000;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 3.890 3.791 3.696 3.605;6 4.486 4.355 4.231 4.111;The cash payback period for Project Soup is;1. 20 years;2. 10 years;3 5 years;4. 4 years

 

Paper#27029 | Written in 18-Jul-2015

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