Business, 05.05.2020 21:28 kitttimothy55

McKnight Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $400,000, has an expected useful life of 10 years, a salvage value of zero, and is expected to increase net annual cash flows by $70,000. Project B will cost $310,000, has an expected useful life of 10 years, a salvage value of zero, and is expected to increase net annual cash flows by $55,000. A discount rate of 9% is appropriate for both projects. Compute the net present value and profitability index of each project. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round present value answers to 0 decimal places, e. g. 125 and profitability index answers to 2 decimal places, e. g. 15.25. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
Net present value - Project A $
Profitability index - Project A
Net present value - Project B $
Profitability index - Project B
Which project should be accepted based on Net Present Value? Project A or B?
Which project should be accepted based on the profitability index? Project A or B?

Answers: 1

Show answers

Another question on Business

Business, 21.06.2019 14:00

List five words to describe your dominant culture. list five words to describe a culture with which you are not a member, have little or no contact, or have limited knowledge. can someone explain what its meaning?

Answers: 1

Answer

Business, 22.06.2019 09:30

Darlene has a balance of 3980 on a credit card with an apr of 22.8% paying off her balance and which of these lengths of time will result in her paying the least amount of interest?

Answers: 2

Answer

Business, 22.06.2019 12:40

When cell phones were first entering the market, they were relatively large and reception was undependable. all cell phones were essentially the same. but as the technology developed, many competitors entered, introducing features unique to their phones. today, cell phones are only a small fraction of the size and weight of their predecessors. consumers can buy cell phones with color screens, cameras, internet access, daily planners, or voice activation (and any combination of these features). the history of the cell phone demonstrates what marketing trend?

Answers: 3

Answer

Business, 22.06.2019 17:50

The management of a supermarket wants to adopt a new promotional policy of giving a free gift to every customer who spends > a certain amount per visit at this supermarket. the expectation of the management is that after this promotional policy is advertised, the expenditures for all customers at this supermarket will be normally distributed with a mean of $95 and a standard deviation of $20. if the management wants to give free gifts to at most 10% of the customers, what should the amount be above which a customer would receive a free gift?

Answers: 1

Answer

You know the right answer?

McKnight Company is considering two different, mutually exclusive capital expenditure proposals. Pro...

Questions