5 project b 950021000 02 950010500 project

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Unformatted text preview: B $9,500/($21,000 + $0)/2 = $9,500/$10,500 = Project C $11,000/($21,000+$1,000/2) =$11,000/$11,000 = 90.4% 100.0% Cash Payback Period = $ invested/ Estimated Annual Cash Inflow Project A $21,000/($10,500+$6,000) = $21,000/$16,500 = 1.27 years Project B $21,000/($9,500+$7,000) = $21,000/$16,500 = 1.27 years Project C $21,000/($11,000+$6,667) = $21,000/$17,667 = Discounted Cash Flow Present Value of Future Cash Inflows: Project A: Years 1 to 3 Year 3 Residual Value 1.19 years Cash Inflow $16,500 $3,000 P.V. Factor 2.28323 0.65752 $16,500 2.28323 $37,673 $21,000 $16,673 $17,667 $1,000 2.28323 0.65752 $40,338 $658 Proj. C also has a residual value, so a one-time cash flow $40,995 in year 3. One time cash flows us...
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This document was uploaded on 04/07/2014.

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