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Question: Q4 Queen Elizabeth Enterprises is considering three new projects which will each require an inves...

Q4 Queen Elizabeth Enterprises is considering three new projects which will each require an investment in new equipment costing $45,000. Each project will last for 3 years and generate the following cash inflows:

Project A Year 1 $13,640, Year 2 $19,500 Year 3 $29,200

Project B Year 1 $18,380 Year 2 $19,500 Year 3 $20,600

Project C Year 1 $30,200 Year 2 $19,500 Year 3 $19,760

The equipment has no salvage value. Straight line depreciation is used and the cost of capital (discount rate) is 10%. (5 points each 45 points total)

What is the cash payback period for project A? _________________________ years

What is the cash payback period for project B? __________________________ years

What is the cash payback period for project C? __________________________ years

What is project As net present value? $__________________________________

What is project Bs net present value? $__________________________________

What is project Cs net present value? $__________________________________

What is project As present value index? _______________________________

How much net income will be generated by project B over the three year period? $________________________________

What is the average rate of return for project C? $ _______________________________

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