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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
The management of Dewitz Corporation is considering a project that would require an initial investment of $72,000. No other cash outflows would be required. The present value of the cash inflows would be $85,680. The profitability index of the project is closest to:
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(Ignore income taxes in this problem.) Brewer Company is considering purchasing a machine that would cost $578,100 and have a useful life of 8 years. The machine would reduce cash operating costs by $92,708 per year. The machine would have a salvage value of $116,020 at the end of the project. |
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| Required | |
| a. |
Compute the payback period for the machine. (Round your answer to 2 decimal places.) |
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| Payback period | years |
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| b. |
Compute the simple rate of return for the machine. (Round your intermediate calculations to nearest dollar amount and final answer to 2 decimal places.) |
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| Simple rate of return | % |
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