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NPV with Unequal Cash Flows - Sanchez Corporation Solution




Question;NPV with Unequal Cash FlowsSanchez Corporation is considering three long-term capital investment proposals. Relevant data on each project are as follows.ProjectBrownRedYellowCapital investment:190,000220,000250,000Annual net income:Year125,00020,00026,000216,00020,00024,000313,00020,00023,000410,00020,00017,00058,00020,00020,000Total72,000100,000110,000Salvage 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#40850 | Written in 18-Jul-2015

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