Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. consider the following two investments, each of wh

Consider the following two investments, each of which has an original cost of $12.000. Net...

90.2K

Verified Solution

Question

Accounting

image
Consider the following two investments, each of which has an original cost of $12.000. Net revenues ($) Year Investment A Investment B DOWN 3,000 3.000 3,000 3,000 3,000 3,000 1,000 1.000 3,000 3,000 4,000 7.000 Here is a table of discount factors (e.g. Present Value of $1.00) for different interest rates: Year 4% 5% 6% 1 0 .9620 .952 0.943 2 0 .9250 .907 0.890 3 0 .8890 .864 0.840 4 0.8550 .8230 .792 5 0 .8221 0.784 0.747 6 0 .790 0.746 0.705 1) Calculate the payback period for investments A and B. Which is preferred by this criterion? 2) Calculate the simple rate of return for investments A and B. Which is preferred by this criterion? 3) Calculate the Net Present Value of A and B using a 4% discount factor. Which is preferred by this criterion? 4) Calculate the Net Present Value of A and B using a 6% discount factor. Which is preferred by this criterion

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Geometry
1.2K views

Jacob ate a slice of pizza that his mom left on the counter What is...

Statistics
1.2K views

A corporation randomly selects 150 salespeople and finds that​ 66% who have never taken a​ self-improvement...

Basic Math
1.2K views

The Table in my homework question below is completely wrong. I am not sure where I...

Basic Math
1.2K views

When σ is unknown and the sample is of size n ≥ 30, there are two...

Civil Engineering
1.2K views

The soil profile at a site consists of a clay layer 10 m thick, sandwich between...

Chemistry
1.2K views

Describe below (briefly) a) the motivation for hybridization in valence bond theory and b) why valence...

Physics
1.2K views

A 0.5-kg mass is attached to a spring with spring constant 2.5 N/m. The spring experiences...

Physics
1.2K views

21 A potentiometer circuit has been set up for finding the internal resistance of a...

Geometry
1.2K views

The two triangles below are similar 15 I 36 40 10 104 K X 40...

Calculus
1.2K views

Show that the value of the integral below does not depend on the path taken...

Calculus
1.2K views

Differentiate y 8x 5 tan x

Accounting
1.2K views

For the year ended December 31, 2018, Transformers Inc. reported the following: Net income $180,000...