60003600167 year 12 A project has an initial cost of 6500 The cash inflows are

# 60003600167 year 12 a project has an initial cost of

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6000/3600=1.67 year 12. A project has an initial cost of \$6,500. The cash inflows are \$900, \$2,200, \$3,600, and \$4,100 over the next four years, respectively. What is the payback period? 6500-(900+2200)=3400 3400/3600=0.94 so the payback period is 2.94 years. 13. A project has an initial cost of \$18,400 and produces cash inflows of \$7,200, \$8,900, and \$7,500 over three years, respectively. What is the discounted payback period if the required rate of return is 16 percent? Never 14. You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight-line depreciation to a zero book value over the life of the project. Neither project has any salvage value. Which project should you accept?

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I will accept project b, because they will have more return and less cash flow at the first year. 15. Motor City Productions sells original automotive art on a prepaid basis as each piece is uniquely designed to the customer's specifications. For one project, the cash flows are estimated as follows. Based on the internal rate of return (IRR), should this project be accepted if the required return is 9 percent? (5500 - 5900)/5500=7.27 % So this project should be accepted if the return is 9%
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