1. Radiology Associates is considering an investment which will cost $259,000. The investment produces no cash flows for the first year. In the second year, the cash inflow is $58,000. This inflow will increase to $150,000 and then $200,000 for the following two years before ceasing permanently. The firm requires a 14 percent rate of return and has a required discounted payback period of three years. Accept or reject his project? Why?;2. Puppy Inc. has the following mutually exclusive investment opportunities. If the appropriate discount rate was 15% what should you do?;Year Project X Project Y;0 -500 -800;1 100 500;2 475 350;3 50 350;A. Calculates each project?s payback period cutoff. Which would you accept if Puppy?s payback period cutoff is 2 years?;B. Calculate each project?s discounted payback period cutoff. Which would you accept if Puppy?s payback period cutoff is 2 years?;C. What is the NPV for each project?;Additional Requirements;Level of Detail: Show all work;Other Requirements: Please show step by step on excel spreadsheet.
Paper#29845 | Written in 12-Dec-2015Price : $25