# HW #2 (answers) - Name Class Time FIN 445 Homework#2 The...

This preview shows pages 1–3. Sign up to view the full content.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
1. You have just landed a job as a financial analyst at a convenient store. On your first day, your boss walks into your cube and asks you to evaluate two mutually exclusive projects: one is a new hot dog warmer and the other is nacho cheese station. Thoroughly disgusted and questioning your decision to take this job, you begin work immediately. Your boss provided you with the following information: The required rate of return is 10.75 percent for the hot dog warmer and 12 percent for the nacho cheese station. The convenient store has a 2 year payback cutoff on all capital expenditures. Year Hot Dog Warmer Nacho Cheese Station 0 -36,000 -69,900 1 21,600 52,600 2 18,200 46,100 3 22,100 0 Not knowing which metric your boss wants you to use to evaluate the project, you solve for two. What is the payback period for each of the 2 projects? Hot Dogs:
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 01/20/2011 for the course FIN 645 taught by Professor Staff during the Fall '08 term at Kentucky.

### Page1 / 6

HW #2 (answers) - Name Class Time FIN 445 Homework#2 The...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online