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Roshek Company is considering a capital investment proposal. Estimates regarding the project are provided below: I...

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Finance

Roshek Company is considering a capital investment proposal.Estimates regarding the project are provided below: I nitialInvestment: $85,000 Annual Net income: $5,750 Estimated UsefulLife: 5 years Salvage Value: $10,000 The Company requires a 9% rateof return on all new investments. a. The Payback Period (rounded)for this proposal is? b. The Net Present Value (rounded) for thisproposal is? c. The Annual Rate of Return (rounded) for thisproposal is?

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3.6 Ratings (693 Votes)
Initial Investment 85000 Salvage Value 10000 Useful Life 5 years Annual Depreciation Initial Investment Salvage Value Useful Life Annual Depreciation 85000 10000 5    See Answer
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Roshek Company is considering a capital investment proposal.Estimates regarding the project are provided below: I nitialInvestment: $85,000 Annual Net income: $5,750 Estimated UsefulLife: 5 years Salvage Value: $10,000 The Company requires a 9% rateof return on all new investments. a. The Payback Period (rounded)for this proposal is? b. The Net Present Value (rounded) for thisproposal is? c. The Annual Rate of Return (rounded) for thisproposal is?

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