[gymnast21]

The Three Stooges partnership is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows.
Project Moe Project Larry Project Curly
Capital investment $150,000 $160,000 $200,000
Annual net income:
Year 1 13,000 18,000 27,000
2 13,000 17,000 22,000
3 13,000 16,000 21,000
4 13,000 12,000 13,000
5 13,000
9,000
12,000

Total $65,000
$72,000
$95,000



Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.)






Incorrect.

Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.)
Project Moe years
Project Larry years
Project Curly years








Incorrect.

Compute the net present value for each project. (Round computations for 15% Discount Factor to 5 decimal places. Round answers to 0 decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Project Moe $
Project Larry $
Project Curly $

[gymnast21]

Carolina Clinic is considering investing in new heart monitoring equipment. It has two options: Option A would have an initial lower cost but would require a significant expenditure for rebuilding after 4 years. Option B would require no rebuilding expenditure, but its maintenance costs would be higher. Since the option B machine is of initial higher quality, it is expected to have a salvage value at the end of its useful life. The following estimates were made of the cash flows. The company's cost of capital is 11%.
Option A Option B
Initial cost $160,000 $227,000
Annual cash inflows $75,000 $80,000
Annual cash outflows $35,000 $30,000
Cost to rebuild (end of year 4) $60,000 $ 0
Salvage value $ 0 $12,000
Estimated useful life 8 years 8 years







Incorrect.

Compute the (1) net present value, (2) profitability index, and (3) internal rate of return for each option. (Hint: To solve for internal rate of return, experiment with alternative discount rates to arrive at a net present value of zero.) (Round computations and final answer for net present value to 0 decimal places, e.g. 125. Round profitability index to 2 decimal places, e.g. 10.50.)
Net Present Value Profitability Index Internal Rate of Return
Option A $ 6321 12 %
Option B $ 15 %

[morgaine300]

Please see the guidelines for posting homework in the red print at the top of this forum.

Those are also two different problems and it's better if you post individual problems in separate threads or things just get confused between the two of them.

[kea1220]

Did u get the answers for these questions?

[morgaine300]

You could maybe get help on the questions if you would post them, and your attempts at doing them, in your own thread. If you will read the post above yours, you'll see there are guidelines for posting homework, which is in big red print at the top of all homework forums. The guidelines explicitly state we do not just give answers out.