Question

In: Finance

Three investments each cost $3,000 and have the following cash flows. If you had to choose...

Three investments each cost $3,000 and have the following cash flows. If you had to choose only one project based on payback period, which would you choose?

Year

Expected Cash Flows

A

B

C

0

-$3,000

-$3,000

-$3,000

1

      1,200

1,700

            -

2

      1,300

1,100

2,000

3

1,400

1,700

1,500

4

1,500

-

1,000

B with a payback of 2.12 years

A with a payback of 2.36 years

C with a payback of 2.67 years

B with a payback of 2.47 years

A with a payback of 2.11 years

Solutions

Expert Solution

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Three investments cost $5,000 each and have the following cash flows. Rank them on the basis...
Three investments cost $5,000 each and have the following cash flows. Rank them on the basis of their payback periods. Round your answers to one decimal place. Year A B C 1 $ 1,800 $ 2,800 $ 0 2 1,800 2,100 1,000 3 1,800 1,400 1,700 4 1,800 1,100 3,000 5 1,800 500 5,500 Payback for A:  years ? Payback for B:  years ? Payback for C:  years ? Based on the payback periods, -Select-investment (A,B,C)should be chosen.
Problem 19-05 Three investments cost $5,000 each and have the following cash flows. Rank them on...
Problem 19-05 Three investments cost $5,000 each and have the following cash flows. Rank them on the basis of their payback periods. Round your answers to one decimal place. Year A B C 1 $ 1,900 $ 2,900 $ 0 2 1,900 2,200 900 3 1,900 1,200 1,300 4 1,900 900 4,200 5 1,900 600 7,200 Payback for A: ____ years Payback for B: ____ years Payback for C: ____ years
You are given three investment alternatives to analyze. The cash flows from these three investments are...
You are given three investment alternatives to analyze. The cash flows from these three investments are as​ follows: Investment End of Year     A     B     C 1 ​$ 2 comma 0002,000   ​$ 3 comma 0003,000 ​$ 4 comma 0004,000   2    3 comma 0003,000   3 comma 0003,000 4 comma 0004,000   3    4 comma 0004,000   3 comma 0003,000 ( 4 comma 000 )(4,000) 4    ( 5 comma 000 )(5,000) 3 comma 0003,000 ( 4 comma 000 )(4,000) 5    5 comma 0005,000   5 comma...
You are given three investment alternatives to analyze. The cash flows from these three investments are...
You are given three investment alternatives to analyze. The cash flows from these three investments are as​ follows: Investment End of Year     A     B     C 1 ​$ 2 comma 0002,000   ​$ 3 comma 0003,000 ​$ 4 comma 0004,000   2    3 comma 0003,000   3 comma 0003,000 4 comma 0004,000   3    4 comma 0004,000   3 comma 0003,000 ( 4 comma 000 )(4,000) 4    ( 5 comma 000 )(5,000) 3 comma 0003,000 ( 4 comma 000 )(4,000) 5    5 comma 0005,000   5 comma...
You are given three investment alternatives to analyze. The cash flows from these three investments are...
You are given three investment alternatives to analyze. The cash flows from these three investments are as​ follows: End of Year   A   B   C 1   $3,000   $3,000   $4,000 2   4,000   3,000   4,000 3   5,000   3,000   (4,000) 4   -6,000   3,000   (4,000) 5   6,000   7,000   14,000 What is the present value of each of these three investments if the appropriate discount rate is 14 percent? a.  What is the present value of investment A at an annual discount rate of 14 percent?
You are given three investment alternatives to analyze. The cash flows from these three investments are...
You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: End of Year   A   B   C 1   $1,000   $3,000   $5,000 2   2,000   3,000   5,000 3   3,000   3,000   (5,000) 4   -4,000   3,000   (5,000) 5   4,000   6,000   15,000 What is the present value of each of these three investments if the appropriate discount rate is 15 percent?
You are given three investment alternatives to analyze. The cash flows from these three investments are...
You are given three investment alternatives to analyze. The cash flows from these three investments are as​ follows: End of year a b c 1 $1,000 $2,000 $6,000 2 2,000 2,000 6,000 3 3,000 2,000 (6,000) 4 (4,000) 2,000 (6,000) 5 4,000 5,000 16,000 What is the present value of each of these three investments if the appropriate discount rate is 9 percent?
You are given three investment alternatives to analyze. The cash flows from these three investments are...
You are given three investment alternatives to analyze. The cash flows from these three investments are as​ follows: Investment End of Year A B C 1 $1,000   $3,000   $5,000 2 2,000 3,000 5,000 3 3,000 3,000 (5,000) 4 -4,000 3,000 (5,000) 5 4,000 7,000 15,000 What is the present value of each of these three investments if the appropriate discount rate is 13 percent?
You have the following information on a project's cash flows. The cost of capital is 8.0%
  You have the following information on a project's cash flows. The cost of capital is 8.0% Year Cash flows 0 -$101,000 1 23,000 2 23,000 3 25,000 4 32,000 5 61,000 The NPV of the project is $____. Round to two decimal places.
1. You have the following information on a project's cash flows. The cost of capital is...
1. You have the following information on a project's cash flows. The cost of capital is 16.1%. Year Cash Flows 0 -$105,000 1 47,000 2 13,000 3 31,000 4 39,000 5 -24,000 The NPV of the project is $____. Round to two decimal places. 2. Given a face value of $1,000 and 19 years to maturity, what is the price of a zero coupon bond if rates are at 6.7 percent (assume semi-annual compounding)? (Round your answer to 2 decimal...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT