Cooper Company must evaluate two capital expenditure proposals. Cooper's hurdle rate is 10%. Data for the two proposals follow. Proposal Proposal X $120,000 $120,000 24,000 Required investment Annual after-tax cash inflows After-tax cash inflows at the end of years 3, 6, 9, and 12 Life of project Using net present value analysis, which proposal is the more attractive? Do not use negative signs with your answers. Round PV answers to the nearest whole number. Use rounded answers for subsequent calculation of net present value. Proposal X Proposal Y Net present value Initial outflows PV of future cash flows Net present value $ $ Which proposal is more attractive? $ 72,000 12 years 12 years $

Cooper Company must evaluate two capital expenditure proposals. Cooper's hurdle rate is 10%. Data for the two proposals follow. Proposal Proposal X $120,000 $120,000 24,000 Required investment Annual after-tax cash inflows After-tax cash inflows at the end of years 3, 6, 9, and 12 Life of project Using net present value analysis, which proposal is the more attractive? Do not use negative signs with your answers. Round PV answers to the nearest whole number. Use rounded answers for subsequent calculation of net present value. Proposal X Proposal Y Net present value Initial outflows PV of future cash flows Net present value $ $ Which proposal is more attractive? $ 72,000 12 years 12 years $

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.3.1P

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