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It will cost $2,400 to acquire an ice cream cart. Cart sales are expected to be $1,600 a year for three years. After the three years, the cart is

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It will cost $2,400 to acquire an ice cream cart. Cart sales are expected to be $1,600 a year for three years. After the three years, the cart is expected to be worthless as the expected life of the refrigeration unit is only three years. What is the payback period? 1.50 years 2.50 years 2.33 years 1.33 years .50 years A firm evaluates all of its projects by using the NPV decision rule. At a required return of 11 percent, the NPV for the and the firm should the project. At a required return of 30 p and the firm should the project. (Do not include the dollar amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16)) Year Cash Flow 0 −$30,000 1 23,000 2 15,000 3 6,000 A project that provides annual cash flows of $12,200 for 11 years costs $66,523 today. If the required return is 11 percent, the NPV for the project is $ and you would a) accept or b)reject the project. At a discount rate of percent, you would be indifferent between accepting the project and rejecting it. (Do not include the dollar & percent signs ($ & %). Negative amount should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16)) The payback period for the following set of cash flows is years. (Round your answer to 2 decimal Year Cash Flow 0 −$7,700 1 1,000 2 2,600 3 2,000 4 2,800 Buy Coastal, Inc., imposes a payback cutoff of 4 years for its international investment projects. Suppose the company has the following two projects available. Project A has payback period
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of years, while project B has a payback period of years. Therefore, it should a)reject or B) accept project A and a)reject or B) accept project B A firm evaluates all of its projects by applying the IRR rule. The IRR for the following project is p return is 20 percent, the firm should a)reject or B) accept the project. (Do not sign (%). Round your answer to 2 decimal places. (e.g., 32.16)) Year Cash Flow 0 −$34,072 1 22,000 2 16,000 3 9,000 The IRR for the following set of cash flows is percent. (Do not include the percent sign (%). Rou decimal places. (e.g., 32.16)) Year Cash Flow 0 −$12,300 1 6,300 2 6,600 3 5,300
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Accounting-8089559.xls

Question: It will cost $2,400 to acquire an ice cream cart. Cart sales are expected to be $1,600 a year for three years. After the three years, the cart
is expected to be worthless as the expected...

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