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  • Asignacion 5 Semana Finansa

    Transféré par

    Michell VAlle
    366 vues2 pages
    The document presents cash flow information for three projects - Project A, B, and C - being considered by Neil Corporation. Each project has an initial investment of $40,000 and cash flows over 5 years. All three projects have a discounted payback period of 1 year, meaning the present value of the cash flows for each project exceeds the initial $40,000 investment within the first year.

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    Asignacion 5 semana finansa

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    The document presents cash flow information for three projects - Project A, B, and C - being considered by Neil Corporation. Each project has an initial investment of $40,000 and cash flows over 5 years. All three projects have a discounted payback period of 1 year, meaning the present value of the cash flows for each project exceeds the initial $40,000 investment within the first year.

    Droits d'auteur :

    Attribution Non-Commercial (BY-NC)
    Téléchargez comme DOCX, PDF, TXT ou lisez en ligne sur Scribd
    Signaler comme contenu inapproprié
    366 vues2 pages

    Asignacion 5 Semana Finansa

    Transféré par

    Michell VAlle
    The document presents cash flow information for three projects - Project A, B, and C - being considered by Neil Corporation. Each project has an initial investment of $40,000 and cash flows over 5 years. All three projects have a discounted payback period of 1 year, meaning the present value of the cash flows for each project exceeds the initial $40,000 investment within the first year.

    Droits d'auteur :

    Attribution Non-Commercial (BY-NC)
    Téléchargez comme DOCX, PDF, TXT ou lisez en ligne sur Scribd
    Signaler comme contenu inapproprié
    sur 2

    1. Neil Corporation has three projects under consideration.

    The cash flows for each of them


    are shown in the following table. The firm has a 16% cost of capital.

    Project A Initial Investment of $40,000

    Year Cash Flow P.V Factor P.V. Cash Flow Total to Date
    1 $13,000 .862 $11,206 $11,206
    2 $13,000 .743 $9,659 $20,865
    3 $13,000 .641 $8,333 $29,198
    4 $13,000 .552 $7,176 $36,374
    5 $13,000 .476 $6,188 $42,562

    Discounted Payback Period:

    42,562 / 40,000 = 1 year

    Project B Initial Investment of $40,000

    Year Cash Flow P.V Factor P.V. Cash Flow Total to Date
    1 $7,000 .862 $6,034 $6,034
    2 $10,000 .743 $7,430 $13,464
    3 $13,000 .641 $8,333 $21,797
    4 $16,000 .552 $8,832 $30,629
    5 $19,000 .476 $9,044 $39,673

    Discounted Payback Period:

    40,000 / 39,673= 1 year

    Project C Initial Investment of $40,000

    Year Cash Flow P.V Factor P.V. Cash Flow Total to Date
    1 $19,000 .862 $16,378 $16,378
    2 $16,000 .743 $11,888 $28,266
    3 $13,000 .641 $8,333 $36,599
    4 $10,000 .552 $5,520 $42,119
    5 $7,000 .476 $3,332 $45,451

    Discounted Payback Period:

    45,451/40,000 = 1 year

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