Question: Please answer the answer with the red mark which is wrong: Net Present Value Analysis Herrnson Company must evaluate two capital expenditure proposals. Hermson's cutoff
Please answer the answer with the red mark which is wrong:

Net Present Value Analysis Herrnson Company must evaluate two capital expenditure proposals. Hermson's cutoff rate is 12%. Data for the two proposals follow. Proposal X ProposalY Required investment Annual after-tax cash inflows After-tax cash inflows at the end of years 3, 6,9, and 12 Life of project 140,000 $140,000 33,000 99,000 12 years 12 years What is the cash payback period for Proposal X? For Proposal Y? Hint: For Proposal Y, in what year (3, 6,9 or 12) will the full original investment be recovered? Round Proposal X answer to one decimal place, if applicable. Proposal X 4.2 years Proposal Y :3 years
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
