Q1. Dinah, the operator of Dinah's Diner, wishes to choose between two alternative investments providing the...
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Q1. Dinah, the operator of Dinah's Diner, wishes to choose between two alternative investments providing the following annual net cash inflows over the five-year investment period: Year Alternative 2 $ 4,200 5,800 8,500 11,500 12,100 12 3 4 5 Alternative 1 $8,000 8,600 8,800 8,200 4,100 a. Calculate the paypack time for each alternative, assuming initial investment of $33,000 under each alternative. (3 points) b. Using NPV at 12 percent, would either of them be a good investment for Dinah? (3 points) Q1. Dinah, the operator of Dinah's Diner, wishes to choose between two alternative investments providing the following annual net cash inflows over the five-year investment period: Year Alternative 2 $ 4,200 5,800 8,500 11,500 12,100 12 3 4 5 Alternative 1 $8,000 8,600 8,800 8,200 4,100 a. Calculate the paypack time for each alternative, assuming initial investment of $33,000 under each alternative. (3 points) b. Using NPV at 12 percent, would either of them be a good investment for Dinah? (3 points)
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Related Book For
Managerial economics applications strategy and tactics
ISBN: 978-1439079232
12th Edition
Authors: James r. mcguigan, R. Charles Moyer, frederick h. deb harris
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