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Carla Vista Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows.     Project Bono   Project Edge Project Clayton   Capital investment     $165,000   $183,000   $212,000   Annual net income:               Year  1   15,400   19,800   29,700           2   15,400   18,700   25,300           3   15,400   17,600   23,100           4   15,400   13,200   14,300           5   15,400   9,900   13,200     Total   $77,000   $79,200   $105,600   Depreciation is computed by the straight-line method with no salvage value. The company’s cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) Click here to view the factor table. (a)     Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) Project Bono   enter a number of years rounded to 2 decimal places years Project Edge   enter a number of years rounded to 2 decimal places years Project Clayton   enter a number of years rounded to 2 decimal places

Carla Vista Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows.     Project Bono   Project Edge Project Clayton   Capital investment     $165,000   $183,000   $212,000   Annual net income:               Year  1   15,400   19,800   29,700           2   15,400   18,700   25,300           3   15,400   17,600   23,100           4   15,400   13,200   14,300           5   15,400   9,900   13,200     Total   $77,000   $79,200   $105,600   Depreciation is computed by the straight-line method with no salvage value. The company’s cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) Click here to view the factor table. (a)     Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) Project Bono   enter a number of years rounded to 2 decimal places years Project Edge   enter a number of years rounded to 2 decimal places years Project Clayton   enter a number of years rounded to 2 decimal places

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter26: Capital Investment Analysis
Section: Chapter Questions
Problem 4CMA
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Carla Vista Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows.

   
Project Bono
  
Project Edge
Project Clayton
  
Capital investment
     $165,000   $183,000   $212,000  
Annual net income:
              
Year  1
   15,400   19,800   29,700  
        2
   15,400   18,700   25,300  
        3
   15,400   17,600   23,100  
        4
   15,400   13,200   14,300  
        5
   15,400   9,900   13,200  
  Total
   $77,000   $79,200   $105,600  

Depreciation is computed by the straight-line method with no salvage value. The company’s cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.)

Click here to view the factor table.

(a)

 
 
Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.)

Project Bono
  
enter a number of years rounded to 2 decimal places
 years
Project Edge
  
enter a number of years rounded to 2 decimal places
 years
Project Clayton
  
enter a number of years rounded to 2 decimal places
 years
View Policies Current Attempt in Progress Carla Vista Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Capital investment Annual net income: Year 1 Total 2 3 5 сл Project Bono $165,000 15,400 15,400 15,400 15,400 15,400 $77,000 Project Edge $183,000 19,800 18,700 17,600 13,200 9,900 $79,200 Project Clayton $212,000 29,700 25,300 23,100 14,300 13,200 $105,600 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.)
Transcribed Image Text:View Policies Current Attempt in Progress Carla Vista Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Capital investment Annual net income: Year 1 Total 2 3 5 сл Project Bono $165,000 15,400 15,400 15,400 15,400 15,400 $77,000 Project Edge $183,000 19,800 18,700 17,600 13,200 9,900 $79,200 Project Clayton $212,000 29,700 25,300 23,100 14,300 13,200 $105,600 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.)
(a) Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) Project Bono Project Edge Project Clayton years years years
Transcribed Image Text:(a) Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) Project Bono Project Edge Project Clayton years years years
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b) Compute the net present value for each project. (Round answers to O decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present value tA $ Project Bono $ Project Edge +A $ Project Clayton
Transcribed Image Text:b) Compute the net present value for each project. (Round answers to O decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present value tA $ Project Bono $ Project Edge +A $ Project Clayton
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Compute the net present value for each project. (Round answers to 0 decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

   
Project Bono
  
Project Edge
  
Project Clayton
  
Net present value
   $enter a dollar amount rounded to 0 decimal places    $enter a dollar amount rounded to 0 decimal places    $enter a dollar amount rounded to 0 decimal places   
 
 
 
Save for Later
 
 
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