1) Assume the following information for a capital budgeting proposal with a five-year time horizon:...
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Accounting
1)
Assume the following information for a capital budgeting proposal with a five-year time horizon:
Initial investment:
Cost of equipment (zero salvage value)
$ 560,000
Annual revenues and costs:
Sales revenues
$ 300,000
Variable expenses
$ 130,000
Depreciation expense
$ 50,000
Fixed out-of-pocket costs
$ 40,000
The payback period for this investment is closest to:
Multiple Choice
3.29 years.
7.00 years.
4.31 years.
1.98 years.
9)
If you invested $1,200 in a stock today and it earned an 19% return in each of the next three years, then the value of the stock at the end of three years would be closest to:
Multiple Choice
$2,052.
$2,092.
$2,022.
$1,932.
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