Determine the missing amounts and ignore income taxes

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Reference no: EM131879889

Problem - Capital Budgeting

Howell Company has the following information:

 

Project 1

Project 2

Project3

Number of years

5

10

15

Amount of annual cash inflow

$10,000.00

B

$5,000.00

Required initial investment

A

$30,000.00

$32,000.00

Minimum desired rate of return

8%

12%

8%

Net present value

$0

$3,901.20

C

Given:

Present value factor for an ordinary annuity at 8% and 5 periods 3.9927

Present value factor for an ordinary annuity at 8% and 15 periods 8.5595

Present value factor for an ordinary annuity at 12% and 10 periods 5.6502

Present value of one at 8% and 5 periods 0.6806

Present value of one at 8% and 15 periods 0.3152

Present value of one at 12% and 10 periods 0.3220

Required - Determine the missing amounts. Ignore income taxes.

Reference no: EM131879889

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