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The management of Unter Corporation, an architectural design firm, is considering an investment with the...

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Accounting

The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows:

Year Investment Cash Inflow
1 $73,000 $6,000
2 $6,000 $12,000
3 $20,000
4 $22,000
5 $25,000
6 $23,000
7 $21,000
8 $19,000
9 $18,000
10 $18,000

Required:
1.

Determine the payback period of the investment. (Round your answer to 1 decimal place.)
Payback period years

2.

Information on four investment proposals is given below:

Investment Proposal
A B C D
Investment required $ (60,000) $ (130,000) $ (140,000) $ (2,100,000)
Present value of cash inflows 86,600 181,100 213,900 2,803,200
Net present value $ 26,600 $ 51,100 $ 73,900 $ 703,200
Life of the project 5 years 7 years 6 years 6 years

Required:
1.

Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.)
Investment Proposal Project Profitability Index
A
B
C
D

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