Details of this Paper

1. A project will cost $1.9 million. The company...

Description

Solution


Question

1. A project will cost $1.9 million. The company uses a 11% discount rate as a threshold for accepting capital projects. It is expected to have a 5 year life and return the following: Year 1 $400,000 Year 2 $500,000 Year 3 $650,000 Year 4 $900,000 Year 5 $600,000 d. Calculate the Payback Period Year Cash Flow Net Cash Flow 0 -1,900,000 -1,900,000 1 400,000 -1,500,000 2 500,000 -1,000,000 3 650,000 -350,000 4 900,000 550,000 5 600,000 1,150,000 Payback = 3 + (350000 / 900000) = 3.39 years Is this right?

 

Paper#6827 | Written in 18-Jul-2015

Price : $25
SiteLock