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15-02Pr_5e - Instructions Cumulative Net Cash Flow...

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Problem 15-2 Name: Section: Score: 0% Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. A red asterisk (*) will appear in the row immediately to the right of an incorrect answer. 1. a. Home & Garden Music Beat Year Net Cash Flow Year Net Cash Flow 1 1 2 2 3 3 4 4 5 5 Payback Period: years. Payback Period: years b. Net present value analysis: Net Cash Flow Year Music Beat Music Beat 1 2 3 4 5 Total Amount to be invested Net present value 2. Which of the following points are valid and should be included in the report? a. Both products offer the same total net cash flow. b. Both products offer the same cash payback period.
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Unformatted text preview: Instructions Cumulative Net Cash Flow Cumulative Net Cash Flow Present Value of Net Cash Flow Present Value of $1 at 10% Home & Garden Home & Garden c. Because of the timing of the receipt of the net cash flows, the Home & Garden magazine offers a higher net present value. d. Music Beat is not an acceptable investment since it provides less than the minimum required rate of return. e. Both products provide a positive net present value. This means both products would be acceptable, since they exceed the minimum rate of return....
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