those answer are wrong JS Kimmel, Accounting, ce CALCULATOR Problem 24-1A (Part

Question

those answer are wrong

JS Kimmel, Accounting, ce CALCULATOR Problem 24-1A (Part Level Submission) u3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relev ant data on each project are as follows. Project Clayton Project Edge Bono Capital investment Annual net $163,200 $178,500 $204,000 14,280 14,280 14,280 14,280 14,280 $71,400 Year 1 18,360 17,340 16,320 12,240 9,180 $73,440 27,540 23,460 21,420 13,260 12,240 $97,920 2 Total 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 viev PV table Your answer is incorrect. Try again. Compute the cash payback period for each project. (Round ansuwers to 2 decimal places, e.g. 10.50.) Project Bono Project Edge Project 9sl years toill years Clayton years Click if you would like to Show Work for this question: Open Show Work LINK T?TEXT LINK TO TEXT unK T?TEXT V?DEO, APPL?ED SKILLS VIDEO: SIMILAR PROSLEH Attempts: 2 of 5 used

Explanation / Answer

Solution a:

Payback period - Project Bone = 3 Years + ($163,200 - $140,760) / $46920 = 3.48 years

Payback period - Project Edge = 3 Years + ($178,500 - $159,120) / $47940 = 3.40 years

Payback period - Project Clayton = 3 Years + ($204,000 - $194,820) / $54060 = 3.17 years

Computation of Annual and Cumulative Cash Flows - Project Bone Period Net Income Depreciation Cash Inflows Cumuluative Cash Inflows 1 $14,280.00 $32,640.00 $46,920.00 $46,920.00 2 $14,280.00 $32,640.00 $46,920.00 $93,840.00 3 $14,280.00 $32,640.00 $46,920.00 $140,760.00 4 $14,280.00 $32,640.00 $46,920.00 $187,680.00 5 $14,280.00 $32,640.00 $46,920.00 $234,600.00

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