Question 2 Not complete Marked out of 25.00 Flag question NPV and IRR: Unequal Annual Net Cash Inflows Rocky Road Company is evaluating a capital expenditure proposal that has the following predicted cash flows. Initial investment $(85,000) Operation Year 1 $30,500 Year 2 $60,000 Year 3 $31,000 $0 Salvage REQUIRED a. Determine the payback period. Note: Round your answer to two decimal places. Enter 1.251 as 1.25; enter 1.255 as 1.26. years b. Using a discount rate of 12%, determine the net present value of the investment proposal. Note: Round your answer to the nearest dollar. $ 12129 c. Determine the proposal's internal rate of return. Note: Round your answer to two decimal places. Enter 10.251% as 10.25%; enter 10.255 % as 10.26%. %
Question 2 Not complete Marked out of 25.00 Flag question NPV and IRR: Unequal Annual Net Cash Inflows Rocky Road Company is evaluating a capital expenditure proposal that has the following predicted cash flows. Initial investment $(85,000) Operation Year 1 $30,500 Year 2 $60,000 Year 3 $31,000 $0 Salvage REQUIRED a. Determine the payback period. Note: Round your answer to two decimal places. Enter 1.251 as 1.25; enter 1.255 as 1.26. years b. Using a discount rate of 12%, determine the net present value of the investment proposal. Note: Round your answer to the nearest dollar. $ 12129 c. Determine the proposal's internal rate of return. Note: Round your answer to two decimal places. Enter 10.251% as 10.25%; enter 10.255 % as 10.26%. %
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter26: Capital Investment Analysis
Section: Chapter Questions
Problem 2MAD: Assume San Lucas Corporation in MAD 26-1 assigns the following probabilities to the estimated annual...
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NPV and IRR: Unequal Annual Net Cash Inflows
Rocky Road Company is evaluating a capital expenditure proposal that has the following predicted cash flows.
Initial investment $(85,000)
Operation
Year 1
$30,500
Year 2
$60,000
Year 3
$31,000
$0
Salvage
REQUIRED
a. Determine the payback period.
Note: Round your answer to two decimal places. Enter 1.251 as 1.25; enter 1.255 as 1.26.
years
b. Using a discount rate of 12%, determine the net present value of the investment proposal.
Note: Round your answer to the nearest dollar.
$ 12129
c. Determine the proposal's internal rate of return.
Note: Round your answer to two decimal places. Enter 10.251% as 10.25%; enter 10.255 % as 10.26%.
%
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