An asterisk (*) will appear to the right of an incorrect entry. The essay answer will not be graded.
Fill out the table in 1a completely, even after the payback period is reached.
1. a.
Initial investment:
Net Cash Cumulative Net Net Cash Cumulative Net
Flow Cash Flows Flow Cash Flows
Year 1
Year 2
Year 3
Year 4
Year 5
The Sound Cellar magazine achieves payback in
The Pro Gamer magazine achieves payback in
magazine is recommended, based on the cash payback period.
1. b.
Present
Value of
Sound Pro Sound Pro
$1 at 10% Cellar Gamer Cellar Gamer
Year 1
Year 2
Year 3
Year 4
Year 5
Total
Amount to be invested
Net present value
magazine is recommended, based on its higher net present value.
2.
Sound Cellar
Pro Gamer
Net Present Value Analysis
Net Cash Flow
[Key code here]
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Net Cash Flow
Instructions
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Present Value of
[Key essay answer here]
Problem 26-2B
Name:
Section:
0%
Score:
Key Code:
An asterisk (*) will appear to the right of an incorrect entry. The essay answer will not be graded.
Fill out the table in 1a completely, even after the payback period is reached.
1. a.
Initial investment:
Net Cash Cumulative Net Net Cash Cumulative Net
Flow Cash Flows Flow Cash Flows
Year 1 65,000$ 65,000$ 70,000$ 70,000$
Year 2 60,000 125,000 55,000 125,000
1. b.
Present
Value of
Sound Pro Sound Pro
$1 at 10% Cellar Gamer Cellar Gamer
Year 1 0.909 65,000$ 70,000$ 59,085$ 63,630$
Sound Cellar
Pro Gamer
Net Cash Flow
Net Cash Flow
Present Value of
Problem 26-2B
Name:
Solution
Section:
Net Present Value Analysis
ON
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Score:
Instructions
Answers are entered in the cells with gray backgrounds.
$125,000