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maria [59]
3 years ago
12

Consider how McKnight Valley River Park Lodge could use capital budgeting to decide whether the $ 11 comma 500 comma 000 River P

ark Lodge expansion would be a good investment. Assume McKnight ​Valley's managers developed the following estimates concerning the​ expansion: LOADING...​(Click the icon to view the​ estimates.) Assume that McKnight Valley uses the​ straight-line depreciation method and expects the lodge expansion to have a residual value of $ 950 comma 000 at the end of its ten​-year life. The average annual net cash inflow from the expansion is expected to be $ 2 comma 779 comma 548. Compute the payback for the expansion project. Round to one decimal place.
Business
1 answer:
Marina86 [1]3 years ago
4 0

Answer:

4.1 years

Explanation:

The payback period is the time it takes the project to recover the initial investment required to carry it out.

We are not given any information about the actual yearly revenues and costs, but you give the average net cash flow per year, so we can use that amount to calculate the payback period:

the payback period = total investment / net cash flow = $11,500,000 / $2,779,548 = 4.137 ≈ 4.1 years

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Your Godmother left you an inheritance of ​$100,000​, payable to you when you turn 26 years old. You are now 21.​ Currently, the
KIM [24]

Answer:

The offer should be accepted

Explanation:

It is known that the amount $100,000 will be paid to someone when he turns 26 years. The current age is 21 years.

the 5-years bond is given 3.1 percent of interest rate.

another option for the person is offered $103,021.02 right away which is the present value.

The present value of the $100,000 that is going to be received after 5 years is calculated as follows;

Present value =  Amount to be received /(1+interest rate/100)^t

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Therefore, the present value is $85,843.35 for the amount $100,000 to be receive after five years.

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6 0
3 years ago
A company is considering two capital investments. Each requires an initial investment of $15,000 and has a 4 year useful life. I
yaroslaw [1]

Answer:

3 years

Explanation:

The computation of the payback period is shown below:

Payback period = Initial investment ÷ Net cash flow

where,  

Initial investment is $15,000

And, the net cash flow would be

= Year 1 + year 2 + year 3 + year 4

= $5,000 + $5,000 + $5,000 + $5,000

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As we see that the net cash flow is recovered in three years that means net cash flows and the initial investment are equal

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Payback period would be

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