Home / Questions / The capital investment committee of Estate Landscaping Company is considering two capital ...
The capital investment committee of Estate Landscaping Company is considering two capital investments. The estimated income from operations and net cash flows from each investment are as follows:
|
|
Greenhouse |
Skid Loader |
||
|
|
Income from |
Net Cash |
Income from |
Net Cash |
|
Year |
Operations |
Flow |
Operations |
Flow |
|
1 |
$16,000 |
$ 30,000 |
$26,000 |
$ 40,000 |
|
2 |
16,000 |
30,000 |
21,000 |
35,000 |
|
3 |
16,000 |
30,000 |
16,000 |
30,000 |
|
4 |
16,000 |
30,000 |
11,000 |
25,000 |
|
5 |
16,000 |
30,000 |
6,000 |
20,000 |
|
|
$80,000 |
$150,000 |
$80,000 |
$150,000 |
Each project requires an investment of $70,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 12% for purposes of the net present value analysis.
Instructions
1. Compute the following:
a. The average rate of return for each investment. Round to one decimal place.
b. The net present value for each investment. Use the present value of $1 table appearing in this chapter.
2. Prepare a brief report for the capital investment committee, advising it on the relative merits of the two investments.
Jul 01 2020 View more View Less
Phenols (ArOH) are relatively acidic, and the presence of a substituent group on the aromatic ring has a large effect. The pKa of unsubstituted phenol, for example, is 9....
Jun 14 2021Standard deviation I. For each lettered part, a through c, examine the two given sets of numbers. Without doing any calculations, decide which set has the larger standard...
Apr 26 2020Equal Protection.With the objectives of preventing crime, maintaining property values, and preserving the quality of urban life, New York City enacted an ordinance to reg...
Jul 28 2021Who usually commits financial statement fraud?Here is a tip:Financial statement fraud is the intended act of misreporting the data recorded in the financial statements th...
Aug 16 2021Mr. James McWhinney, president of Daniel-James Financial Services, believes there is a relationship between the number of client contacts and the dollar amount of sales. ...
Aug 01 2020Identify the strongest type of intermolecular forces in acetone, ethanol, water and hexane. (Structures listed on page 15.) 3. Predict the relative strength of the interm...
Jun 17 2021In 1865 a chemist reported that he had reacted a weighed amount of pure silver with nitric acid and had recovered all the silver as pure silver nitrate. The mass ratio of...
May 14 2021How do consequentialist normative ethical theories and non-consequentialist theories differ? Describe an ethical dilemma involving one organisation, and then critically a...
Apr 24 2021What is the future worth of an equal payment series of $3,000 each quarter for 5 years if the interest rate is 8%/year compounded continuously? (please show work)a.$73,03...
Aug 15 2021Koko, a person with a disability, applies for a job at Lively Sales Corporation for which she is well qualified, but she is rejected. Lively continues to seek applicants ...
Aug 05 2021