Investment-under the payback method

Assignment Help Financial Management
Reference no: EM13804292

Assume a $6,500 investment and the following cash flows for two alternatives.

Year         Investment X                Investment Y

1                  $1,000                             $1,300

2                  $1,800                             $2,000

3                  $1,700                             $1,100

4                  $2,000                             $1,500

5                                                         $ 600

Under the payback method, which of the following would be concluded?

A. Investment X should be selected.

B. Investment X & Y have the same payback period.

C. Investment Y should be selected.

D. Neither investment is acceptable under the payback method.

Reference no: EM13804292

Questions Cloud

Shelf registration : Shelf registration
The managing investment banker is responsible for : The managing investment banker is responsible for
The glass-steagall act prohibited : The Glass-Steagall Act prohibited
Key role of an investment banker : Which of the following is not a key role of an investment banker?
Investment-under the payback method : Under the payback method, which of the following would be concluded?
Statements about the payback method : Which of the following statements about the "payback method" is true?
What is the value of your bond today : Twelve years ago you purchased a 30 year bond with a call provision. The corporation may call the bond any time after 15 years by paying one year’s interest as a penalty. When you purchased the bond its coupon rate was 20% (paid semi annually), curre..
Compute the yield to maturity on a bond : Compute the yield to maturity on a bond that makes coupon payments of $95.00 yearly, currently sales for $990 and will mature in 11 years. HINT: The coupon payment is usually given as a percent and you turn it into a dollar amount and enter it into y..
As the cost of capital increases : As the cost of capital increases,

Reviews

Write a Review

Financial Management Questions & Answers

  Sole owner of all-equity firm-debt is secured by the firm

Suppose that you are the sole owner of an all-equity firm, the assets of which are worth $500,000. The ROA is 15% per year paid as a dividend to you. If you have the firm issue $100,000 of debt at 6%, the interest expense will be paid by the firm out..

  Calculate the annual return

A 25-year maturity bond has a 9% coupon rate, paid annually. It sells today for $1,027.42. Calculate the annual return for the 25-year maturity bond over the next five years

  Question 1a- wildcat company stock is trading for 80 per

question 1a- wildcat company stock is trading for 80 per share. the stock is expected to have a year end dividend of 4

  Bonds make semi-annual payments-what is current bond price

App Store Co. issued 16-year bonds one year ago at a coupon rate of 7.7 percent. The bonds make semi-annual payments. If the YTM on these bonds is 5.4 percent, what is the current bond price? (Do not round intermediate calculations. Round your answer..

  Problem related to the capital expenditure budget

If you were assigned to prepare a capital expenditure budget request to add a retail pharmacy in the hospital, which two individuals from your department(s) would you want to have on your team to help you?

  Future generation telecommunication technology

Future Generation Telecommunication Technology

  Businesses and marketing efforts into new markets

Advances in _____ have opened many new markets for small businesses, allowing them to more effectively expand their businesses and marketing efforts into new markets.

  Compute net paid holidays worked for a full-time employee

the metropolis health system managers are also working on their budgets for next year. each manager must annualize his or her staffing plan, and thus must convert staff net paid days worked to a factor.

  Best measure of risk for stock held in diversified portfolio

Identify the best measure of risk for a stock held in a diversified portfolio?

  What was the flotation cost as percentage of funds raised

The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $17.30 for each of the 15 million shares sold. The initial offering price was $21.00 per share, and the stock rose to $23.40 per share in the first few minutes of t..

  What is the equipment after tax net salvage value

Analysis of an expansion project. Equipment originally cost 16 million which 75% has depreciated. Used equipment can be sold for 4.8 million and tax rate is 35%. What is the equipment after tax net salvage value?

  What is the value of conroys unlevered operations

Marston Marble Corporation is considering a merger with the Conroy Concrete Company. Conroy is a publicly traded company, and its beta is 1.30. Conroy has been barely profitable, so it has paid an average of only 20% in taxes during the last several ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd