One time cash flows use table on page 204 21000 19995

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Unformatted text preview: e Table on page 204. $21,000 $19,995 Project A 87.5% Project B 90.4% Less Original Cost Net Present Value Project B: Years 1 to 3 Less Original Cost Net Present Value Project C: Years 1 to 3 Year 3 Residual Value Less Original Cost Net Present Value Summary Annual Rate of Return Cash Payback Period Net Present Value Estimated Annual Cash Inflow = Net Profit +Depreciation 1.27 years $18,646 1.27 Years $16,673 Present Value $37,673 $1,973 Proj. A also has a residual value, so a one-time cash flow $39,646 in year 3. One time cash flows use Table on page 204. $21,000 $18,646 Project C 100.0% 1.19 years $19,995 Project C is the most attractive as AROR is highest; NPV is highest; Payback period is shortest How Present Value Tables Work Table Page 204 Assume $10,000 is invested @ 10% for 4 years. All $$ are left in the investmen...
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