The partnership of Lou and Bud is considering three long-term capital investment proposals. Relevant data on each

Question:

The partnership of Lou and Bud is considering three long-term capital investment proposals. Relevant data on each project are as follows:

The salvage value is expected to be zero at the end of each project. Depreciation is The company's required rate of return is the company's cost of capital, which is 12%. (Use average net annual cash flows in your calculations.)
Instructions
(a) Calculate the cash payback period for each project.
(b) Calculate the net present value for each project.

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states... Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...