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NPV with Unequal Cash Flows




NPV with Unequal Cash Flows;Sanchez Corporation is considering three long-term capital investment proposals. Relevant data on each project are as follows.;Project;Brown;Red;Yellow;Capital investment;190,000;220,000;250,000;Annual net income;Year;1;25,000;20,000;26,000;2;16,000;20,000;24,000;3;13,000;20,000;23,000;4;10,000;20,000;17,000;5;8,000;20,000;20,000;Total;72,000;100,000;110,000;Salvage value is expected to be zero at the end of each project. Depreciation is computed by the straight-line method. The company?s minimum rate of return is the company?s cost of capital which is 12%.;Instructions;Compute the net present value for each project. (Round to the nearest dollar.)


Paper#35270 | Written in 18-Jul-2015

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