15-06Pr_5e

15-06Pr_5e - Net present value 5. Present value index =...

Info iconThis preview shows pages 1–12. Sign up to view the full content.

View Full Document Right Arrow Icon
Problem 15-6 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 beside, below or above an incorrect answer. 1. Proposal A: -year -month cash pay-back period Year 1 2 3 months Proposal B: -year -month cash pay-back period Year 1 2 months Proposal C: -year -month cash pay-back period Year 1 2 months Proposal D: -year -month cash pay-back period Year 1 Instructions Net Cash Flow Cumulative Net Cash Flow Net Cash Flow Cumulative Net Cash Flow Net Cash Flow Cumulative Net Cash Flow Net Cash Flow Cumulative Net Cash Flow
Background image of page 1

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

View Full DocumentRight Arrow Icon
2 3 months 2. Proposal A: ÷ = ÷ Proposal B: ÷ = ÷ Proposal C: ÷ = ÷ Proposal D: ÷ = ÷ 3. Proposal Reject A B C D 4. Proposal B: Year Net Cash Flow 1 2 3 4 Cash Payback Period Average Rate of Return Accept for Further Analysis Present Value of $1 at 12% Presen Net Ca
Background image of page 2
5 Total Amount to be invested Net present value Proposal C: Year Net Cash Flow 1 2 3 4 5 Total Amount to be invested
Background image of page 3

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

View Full DocumentRight Arrow Icon
Background image of page 4
Background image of page 5

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

View Full DocumentRight Arrow Icon
Background image of page 6
Background image of page 7

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

View Full DocumentRight Arrow Icon
Background image of page 8
Background image of page 9

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

View Full DocumentRight Arrow Icon
Background image of page 10
Background image of page 11

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

View Full DocumentRight Arrow Icon
Background image of page 12
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Net present value 5. Present value index = Total present value of net cash flow Amount to be invested Present value index of Proposal B: = Present value index of Proposal C: = 6. First: Second: 7. First: Second: 8. Indicate whether the statement is true (T) or false (F). Present Value of $1 at 12% Presen Net Ca Based on the net present value, the proposals should be ranked as follows: value per dollar invested), the proposals should be ranked as follows: a. Although Proposal B has the larger net present value, Proposal C has a higher present value index. b. Project B should be favored over project C since it has the higher NPV. c. If funds are limited and only one project can be accepted, then the investment with the greater amount of present value per dollar invested should be selected. nt Value of ash Flow nt Value of ash Flow...
View Full Document

Page1 / 12

15-06Pr_5e - Net present value 5. Present value index =...

This preview shows document pages 1 - 12. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online