14,902 9,556 9,003 $30,842 $28,668 $32,105 The equipment\'s salvage value is zer
ID: 2380369 • Letter: 1
Question
14,902
9,556
9,003
$30,842
$28,668
$32,105
The equipment's salvage value is zero. Buford uses straight-line depreciation. Buford will not accept any project with a payback period over 2 years. Buford's minimum required rate of return is 12%.
Compute each project's payback period, indicating the most desirable project and the least desirable project using this method. (Round to 2 decimal places, e.g. 2.52.)
Compute the net present value of each project. indicating the most desirable project and the least desirable project using this method. (Round to 0 decimal places, e.g. 2,510.)
CC $
Compute the following:
Annual income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. House Company uses the straight-line method of depreciation.
Determine the internal rate of return for each project. (Round the internal rate of return factor to three decimals, e.g. 2.552 and your answer to 0 decimal places, e.g. 2,510.)
If House Company's minimum required rate of return is 11%, which projects are acceptable?
Buford Manufacturing Company is considering three new projects, each requiring an equipment investment of $22,410. Each project will last for 3 years and produce the following cash inflows. The equipment's salvage value is zero. Buford uses straight-line depreciation. Buford will not accept any project with a payback period over 2 years. Buford's minimum required rate of return is 12%. Compute each project's payback period, indicating the most desirable project and the least desirable project using this method. (Round to 2 decimal places, e.g. 2.52.)Explanation / Answer
1)AA - 2.43
BB- 2.35
CC- 1.93
Most Desirable - CC
Least Desirable - AA
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