Question

Flagg Equipment Company is evaluating two alternative investment opportunities. The controller of the company has prepared the following analysis of the two investment proposals:


Instructions
a. For each proposed investment, compute the (1) payback period, (2) return on average investment, and (3) net present value, discounted at an annual rate of 15 percent. (Round the payback period to the nearest tenth of a year and the return on investment to the nearest tenth of a percent.) Use Exhibits 26–3 and 26–4 where necessary.
b. Based on your analysis in part a, which proposal do you consider to be the better investment?
Explain.
In Exhibits 26–3


In Exhibits26–4


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  • CreatedApril 17, 2014
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