Plato Ltd. is considering one of two different projects. Cash flow data for these projects...
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Accounting
Plato Ltd. is considering one of two different projects. Cash flow data for these projects are as follows:
Year
Project CR
Project DR
0
($60814)
($99104)
1
21662
16381
2
31361
41988
3
4504
45402
4
9874
11000
Assuming the companys objective is to minimize the payback period, what is the payback period of the project that should be accepted?
Select one:
a. 3.90 years
b. 2.33 years
c. 3.33 years
d. 2.90 years
Logico Ltd. is considering investing in a project that has a 8-year life. Data relating to this project is as follows:
Initial investment
$643136
Residual value (at the end of 8 years)
$189198
The project is expected to provide the following:
Years 2-8
Sales
$446823
Variable expenses
201070
Fixed costs
159448
All of the above amounts represent cash flows, with the exception of depreciation. (depreciation is included in the above costs) Logico depreciates its assets using the straight-line method.
What are the expected annual cash flows in years 2-8 relating to this investment?
Select one:
a. $345219
b. $166697
c. $245753
d. $143047
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