Question: 12c,d. A part form the amount, please further explain the answer. Thank you c. What is the net present value of the investment? Problems Compute
12c,d. A part form the amount, please further explain the answer. Thank you

c. What is the net present value of the investment? Problems Compute annual rate of return, cash payback, and net present value. P12.1 (LO 1, 2, 5), AN T3 Tools is considering three long-term capital investment proposals. Each invest- ment has a useful life of 5 years. Relevant data (in thousands) on each project are as follows. Project Tandoko Project Tanoto Project Taniwan Capital investment Rp160,000 Rp175,000 Rp200,000 Annual net income: Year 1 14,000 18,000 27,000 2 14.000 17,000 23,000 3 14.000 16,000 21,000 4 14,000 12,000 13,000 5 14.000 9,000 12,000 Total Rp 70,000 Rp 72,000 Rp 96,000 Depreciation is computed by the straight-line method with no residual value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) 12-32 CHAPTER 12 Planning for Capital Investments b. Tanoto Rp(7,312); Taniwan Rp2,163 Instructions a. Compute the cash payback period for each project. (Round to two decimals.) b. Compute the net present value for each project. (Round to nearest rupiah.) e. Compute the annual rate of return for each project. (Round to two decimals.) (Hint: Use average annual net income in your computation.) d. Rank the projects on each of the foregoing bases. Which project do you recommend? Compute annual rate of return, cash payback, and net present wie P12.2 (LO 1, 2, 5), AN Service Writing Lon Timur is an accounting major at a midwestern state Uninority located aproximatel 60 miles from maior city Mam of the students attending the univer
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
