Present Value of $1 Received at the End of Each Period for n Periods (14) (r)...
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Present Value of $1 Received at the End of Each Period for n Periods (14) (r) 1% 1 2 2% 0.990 0980 0.962 0.943 1970 1942 1.886 1.833 4% 6% 8% 10% 0.926 0.909 3 1.783 1.736 2.941 2.884 2.775 2.673 2.577 2.487 3.902 3.808 3.630 3.465 3.312 3.170 Proposal A Initial investment $50,000 Useful life 2 years Differential annual after-tax cash flow $30,000 Proposal B Initial investment $30,000 Useful life 3 years Differential annual after-tax cash flow $15,000 Proposal C Initial investment $80,000 Useful life 4 years Differential annual after-tax cash flow $25,000 Proposal D Initial investment $10,000 Useful life 3 years Differential annual after-tax cash flow $8,000 Based on the NPV method of evaluation, which one of the proposals, outlined above, is the most attractive if the minimum acceptable rate of return is 8%? Present Value of $1 Received at the End of Each Period for n Periods (14) (r) 1% 1 2 2% 0.990 0980 0.962 0.943 1970 1942 1.886 1.833 4% 6% 8% 10% 0.926 0.909 3 1.783 1.736 2.941 2.884 2.775 2.673 2.577 2.487 3.902 3.808 3.630 3.465 3.312 3.170 Proposal A Initial investment $50,000 Useful life 2 years Differential annual after-tax cash flow $30,000 Proposal B Initial investment $30,000 Useful life 3 years Differential annual after-tax cash flow $15,000 Proposal C Initial investment $80,000 Useful life 4 years Differential annual after-tax cash flow $25,000 Proposal D Initial investment $10,000 Useful life 3 years Differential annual after-tax cash flow $8,000 Based on the NPV method of evaluation, which one of the proposals, outlined above, is the most attractive if the minimum acceptable rate of return is 8%?
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To determine the most attractive proposal based on the net present value NPV method of evaluation we need to calculate the NPV for each proposal using ... View the full answer
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-1259692406
18th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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