The following information relates to three independent investment decisions by B

Question

The following information relates to three independent investment decisions by Buckle Enterprises, each with a 10-year life and no salvage value:

Using the present value tables in Exhibits 26-3 and 26-4, compute the missing information pertaining to each investment proposal. (Round "PV factors" to 3 decimal places and your final answers to the nearest dollar amount. Omit the "$" & "%" signs in your response.)

The following information relates to three independent investment decisions by Buckle Enterprises, each with a 10-year life and no salvage value:

Explanation / Answer

A. investment cost= 10000*6.1440=61440

PVAF(10%,10 year)= 6.144

B. incremental cash outflow= (37000*5.65)-141,250=67800

cash outflow=67800/5.65=12000

PVAF(12%,10 year)=5.65

c. discount rate= 8%

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