Which of the following is included in the cost of constructing a building? a.cost of paving the parking lot b.insurance costs du
1 answer:
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Answer:
payback:
A 2.5 less desirable
B 2.2
C 1.75 most desirable
net present value
A -33.89 less desirable
B 2,018
C 7,003 most desirable
Explanation:
payback period: the time of the investment at which recovers the initial investment:
the procedure is as follow:
investment - cash flow per year = carrying value
you repeat this until the cash flow of the next year is equal or higher than the carrying value once that occur you will divide to know at which portion of the year you obtain the payback
A
22,000 - 7,000 - 9,000 = 6,000
6,000 / 12,000 = 0.50
2.5 years
B
22,000 - 10,000 - 10,000 = 2,000
2,000 / 10,000 = 0.2
2.2 years
C
22,000 - 13,000 = 9,000
9,000 / 12,000 = 0.75
1.75 years
net present value: we calculate the discounted value of the cahs inflow:
A
-33.89212828
B
2018.312682
C
7003.052114