A company is considering a purchase of a truck with an initial investment of $160,000. They expect an annual net cash inflow of $30,000. But according to other data obtained from the consulting company, annual net cash inflow may be irregular - $10 000 the first year, $20 000 the second year, and $40 000 the third year and each subsequent year. Calculate 1)The payback period for each cash flow scenario. Which scenario is more profitable for the company? 2) Is this project profitable for the company? According to what criteria the manager can assess the acceptability of the project - your opinion
A company is considering a purchase of a truck with an initial investment of $160,000. They expect an annual net cash inflow of $30,000. But according to other data obtained from the consulting company, annual net cash inflow may be irregular - $10 000 the first year, $20 000 the second year, and $40 000 the third year and each subsequent year. Calculate 1)The payback period for each cash flow scenario. Which scenario is more profitable for the company? 2) Is this project profitable for the company? According to what criteria the manager can assess the acceptability of the project - your opinion
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:A company is considering a purchase of a truck with an initial investment of $160,000. They expect an annual net cash inflow of $30,000. But
according to other data obtained from the consulting company, annual net cash inflow may be irregular - $10 000 the first year, $20 000 the
second year, and $40 000 the third year and each subsequent year.
Calculate
1)The payback period for each cash flow scenario. Which scenario is more profitable for the company?
2) Is this project profitable for the company? According to what criteria the manager can assess the acceptability of the project - your opinion
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