Linda is hoping that an investment of $30,000 will provide additional revenue to the store...
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Linda is hoping that an investment of $30,000 will provide additional revenue to the store of $18,000 per year for 3 years. Her partner in crime, Robert, is confident that a larger investment of $40,200 will be required to bring in a steady flow of $22,800 in new revenue per year for 3 years. Determine the discounted payback period for each investment (using before-tax cash flows). The company's required rate of return is 8%. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 2 decimal places e.g. 15.25.) Click here to view the factor table Whose investment appears to better use the company's resources? TABLE 7.1 Future Value of 1 (Future Value of a Single Sum) (PV)= Future value Pavment [(1+R)N11 A)=RPayment(11+RN1) Present Value of an Annuity Due of 1
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Linda is hoping that an investment of $30,000 will provide additional revenue to the store of $18,000 per year for 3 years. Her partner in crime, Robert, is confident that a larger investment of $40,200 will be required to bring in a steady flow of $22,800 in new revenue per year for 3 years. Determine the discounted payback period for each investment (using before-tax cash flows). The company's required rate of return is 8%. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 2 decimal places e.g. 15.25.) Click here to view the factor table Whose investment appears to better use the company's resources? TABLE 7.1 Future Value of 1 (Future Value of a Single Sum) (PV)= Future value Pavment [(1+R)N11 A)=RPayment(11+RN1) Present Value of an Annuity Due of 1 