User Account

All Pages

What is the Payback Period of Projects A and B

Assignment Help Financial Accounting
Reference no: EM132850081

Question - Your firm has estimated the following cash flows for two mutually exclusive capital investment projects. The firm's required rate of return is 10%. The firm uses 3 years as the cutoff for payback period method.

Year

Project A Cash Flow

Project B Cash Flow

0

-$185,000

-$410,000

1

55,000

120,000

2

55,000

120,000

3

55,000

110,000

4

45,000

110,000

5

45,000

90,000

6

45,000

60,000

Required -

a. What is the Payback Period of Projects A and B?

b. Which project would you accept on the basis of payback period?

c. What is the NPV of projects A and B?

d. Which project would you accept on the basis of NPV?

e. What is the PI of projects A and B?

f. Which project would you accept on the basis of PI?

g. What is the IRR of projects A and B?

h. Which project would you accept on the basis of IRR?

i. Is there a conflict between the methods?

j. Which project(s) would you accept and why?

k. What would be your answer to 10 above if the projects were independent?

Reference no: EM132850081

Questions Cloud

Prepare an acquisition analysis at July by ABC Ltd : Plant can be used for another 5 years since the acquisition date. Inventory are sold by 30/6/2020. The tax rate is 30%. Prepare an acquisition analysis at July
HAR 4073 Tourism Trends and Strategy Assignment : HAR 4073 Tourism Trends and Strategy Assignment Help and Solution, Queens College - Assessment Writing Service - Education tourism Is Important
How much is Lupin estimated inventory at July : Lupin Inc. utilizes the retail inventory method in estimating its inventory for interim statement purposes. How much is Lupin estimated inventory at July
ICT616 Data Resources Management Assignment : ICT616 Data Resources Management Assignment Help and Solution, Murdoch University - Assessment Writing Service
What is the Payback Period of Projects A and B : The firm's required rate of return is 10%. The firm uses 3 years as the cutoff for payback period method. What is the Payback Period of Projects A and B
Calculate the contribution to profit : Thornton Boot Co. sells men's, women's, and children's boots. Calculate the contribution to profit. Determine whether to eliminate the children's department
Reflect on the agile process and the influence : Reflect on the Agile process and the influence on the individual's professional development within the method used in this subject with particular emphasis
What should be recorded as the carrying value : The prevailing rate of interest for a note of this type on January 2, 2019 was 10%. What should be recorded as the carrying value of the note receivable
Draw a flowchart that presents the steps of the algorithm : Draw a flowchart that presents the steps of the algorithm required to perform the task specified. It is recommended to use Draw.io to draw your flowchart

Reviews

Write a Review

Financial Accounting Questions & Answers

  Determine the cost of acquisition of the machine

Determine the cost of acquisition of the machine. Provide journal entries to account for the machine on 1 July 2013 (acquisition) and on 30 June 2014

  Analyze the selected not-for-profits financial statements

Analyze the selected not-for-profit's financial statements to determine if the statements conform to Financial Accounting Standards Board (FASB) guidance.

  Prepare an income statement for this current year

Polarix is a retailer of ATVs (all-terrain vehicles) and accessories. An income statement for its Consumer ATV Department for the current year follows.

  What is the carrying value of the securities on december

What is the carrying value of the securities on December 31, 2012 on Blue's balance sheet? All declines are considered to be temporary.

  Describe characteristic of process costing

Which of the following does not describe a characteristic of process costing? All units of production receive precisely the same amount of material, labor, and overhead.

  What is the usefulness of convexity

What is the usefulness of convexity when duration is available as a measure of interest rate risk? What is the practical implication for the three-year loan

  What is the cost of goods sold to be recorded at january

The other 28 units remain in inventory at January 31. If Orange Kola uses the FIFO flow assumption, what is the cost of goods sold to be recorded at January 14

  University level will help combat unethical decision

Do you think ethical training at the university level will help combat unethical decision making in corporate America? Why? Are there any other professions you think should be  held to a higher standard that are not currently held to that standard

  Describe an information set

Based on the Efficient Markets Hypothesis (EMH), describe an "information set"? Distinguish the information sets used in the different levels of the EMH.

  Prepare journal entries for transactions-financial statement

LEW Jewelry Co. uses gold in the manufacture of its products. LEW anticipates that it will need to purchase 500 ounces of gold in October 2014, for jewelry that will be shipped for the holiday shopping season. Prepare the journal entries for the foll..

  Problem - Forecasted Statements and Ratios

Problem - Forecasted Statements and Ratios. During 2017, use the AFN equation to determine Upton's projected external capital requirements

  Debit note receivable-credit accounts receivable

On November 1, Orpheum Company accepted a $10,000, 90-day, 8% note from a customer settle an account. What entry should be made on the November 1 to record the note acceptance?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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