39. Vita Pharmaceutical Co. is considering four proposals for the expansion of its dietary supplements production facility. The investment requirements and the cash flows for an 8-year period are presented below. P1P2P3P4Initial InvestmentP13MP14.5MP15M15.8MAnnual Receipts1.5M1.6M1.7M2.2MAnnual Disbursements0.7M0.5M0.65M0.7MSalvage Value1.3M1.5M2M2.5MDetermine the best alternative if the company applies a 14% MARR of its investments. (Ans. Consider P4; i2-1=13.27% ; i3-1=5.91% ; i4-1=21.76%)

Given information 4 dietary supplement products For P1 Initial investment=P13M Annual receipts=1.5M…

Answered: Vita Pharmaceutical Co. is considering…

Principles of Accounting Volume 2

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ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

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Problem 18EB: Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the...

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39. Vita Pharmaceutical Co. is considering four proposals for the expansion of its dietary supplements production facility. The investment requirements and the cash flows for an 8-year period are presented below.

	P1	P2	P3	P4
Initial Investment	P13M	P14.5M	P15M	15.8M
Annual Receipts	1.5M	1.6M	1.7M	2.2M
Annual Disbursements	0.7M	0.5M	0.65M	0.7M
Salvage Value	1.3M	1.5M	2M	2.5M

Determine the best alternative if the company applies a 14% MARR of its investments.

(Ans. Consider P4; i_2-1=13.27% ; i_3-1=5.91% ; i_4-1=21.76%)

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