4. Thom J.A.M. Company has P80,000 to invest and is considering two different projects, Vlogging and Blogging. Data pertaining to the two projects are given as follows: Cost of equipment needed now Working capital investment needed now Annual cash operating inflows Salvage value of equipment in 5 years Blogging P80,000 23,000 6,000 Vlogging P80,000 18,000 Additional information: Both projects will have a useful life of 5 years; at the end of 5 years, the working capital investment will be eleased for use elsewhere. J.A.M.'s required rate of return is 12%. What is the net present value of project Blogging? Solution:
4. Thom J.A.M. Company has P80,000 to invest and is considering two different projects, Vlogging and Blogging. Data pertaining to the two projects are given as follows: Cost of equipment needed now Working capital investment needed now Annual cash operating inflows Salvage value of equipment in 5 years Blogging P80,000 23,000 6,000 Vlogging P80,000 18,000 Additional information: Both projects will have a useful life of 5 years; at the end of 5 years, the working capital investment will be eleased for use elsewhere. J.A.M.'s required rate of return is 12%. What is the net present value of project Blogging? Solution:
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 22E
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