DeVry University
ACCT346 Weekly Assignment
Week 7
Directions: Your assignment this week is to answer the four questions below. Please note that Question #1 has 2 parts, Part A and Part B. Please show your work for full credit and use the box provided. Please add more rows or columns to the box if needed.
1. Gomez Corporation is considering two alternative investment proposals with the following data:
	Proposal X	Proposal Y
Investment	$850,000	$468,000
Useful life	8 years	8 years
Estimated annual net	$125,000	$78,000
cash inflows for 8 years
Residual value	$40,000	$ -
Depreciation method	Straight-line	Straight-line
Required rate of return	14%	10%
1a. How long is the payback period for Proposal X?
1b. What is the accounting rate of return for Proposal Y?
2. You have been awarded a scholarship that will pay you $500 per semester at the end of each of the next 8 semesters that you earn a GPA of 3.5 or better. You are a very serious student and you anticipate receiving the scholarship every semester. Using a discount rate of 3% per semester, which of the following is the correct calculation for determining the present value of the scholarship? PLEASE STATE WHY YOU CHOSE THE ANSWER THAT YOU DID.
	A) PV = $500