ch. 12.3

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Chapter 12 & App A-Homework Question 3 of 9 1/4 I View Policies Show Attempt History Current Attempt in Progress Cullumber Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years Relevant data on each project are as follows Project Bono Project Edge Project Clayton Capital investment $161.000 $175.000 $204,000 Annual het income Your 1 14.140 18.300 27,230 14,140 17,170 23230 14340 16,160 21210 14,340) 12.120 14.140 9010 Z 3 O D O 0 Question 3 of 9 1/4 E 14,140 16,160 21,210 14,140 12,120 13,130 5 14,140 9,090 12,120 Total $70,700 $72,720 $96,960 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) Click here to view the factor table. (a) Your answer is correct. Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50) 1 3 4 *** (b) Compute the net present value for each project. (Round answers to 0 decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number eg-45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Project Bono Project Edge Project Clayton Net present value $ $ $ eTextbook and Media Attempts: 0 of 5 used Submit Answer 3) D Chapter 12 & App A-Homework Question 3 of 9 1/4 I View Policies Show Attempt History Current Attempt in Progress Cullumber Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years Relevant data on each project are as follows Project Bono Project Edge Project Clayton Capital investment $161.000 $175.000 $204,000 Annual het income Your 1 14.140 18.300 27,230 14,140 17,170 23230 14340 16,160 21210 14,340) 12.120 14.140 9010 Z 3 O D O 0 Question 3 of 9 1/4 E 14,140 16,160 21,210 14,140 12,120 13,130 5 14,140 9,090 12,120 Total $70,700 $72,720 $96,960 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) Click here to view the factor table. (a) Your answer is correct. Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50) 1 3 4 *** (b) Compute the net present value for each project. (Round answers to 0 decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number eg-45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Project Bono Project Edge Project Clayton Net present value $ $ $ eTextbook and Media Attempts: 0 of 5 used Submit Answer 3) D