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1 2 Exercise 12-1 Payback Method (LO12-1) The...

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Exercise 12-1 Payback Method (LO12-1) The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year Investment $78,000 $ 5,000 1 2. 3 4 5 6 7 8 9 Cash Inflow $ 5,000 $10,000 $12,000 $15,000 $18,000 $16,000 $14,000 $12,000 $11,000 $11,000 10 Required: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large? Exercise 12-14 Comparison of Projects Using Net Present Value (L012-2] Labeau Products, Ltd. of Perth, Australia, has $18,000 to invest. The company is trying to decide between two alternative uses for the funds as follows: Investment required Annual cash inflows Single cash inflow at the end of 6 years Life of the project Invest in Invest in Project X Project $ 18,000 S 18.000 $ 2.000 5 41,000 6 years 6 years The company's discount rate is 17% Click here to view Exhibit 123.1 and Exhibit 12B-2. to determine the appropriate discount factor(s) using tables Required: 1. Compute the net present value of Project X. 2. Compute the net present value of Project Y. 3. Which project would you recommend the company accept

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