The management of Ortega manufacturing has three different proposals under consideration. the accounting department has
Posted: Wed May 04, 2022 4:15 pm
The management of Ortega manufacturing has three different
proposals under consideration. the accounting department has
prepared the following information"
Proposal A
Proposal B
Proposal
C
Initial investment
$3,100,000.
$2,450,000
$2,055,000
Useful life of equipment 7 years
7 years
7 years
Estimated salvage value. $0
$400,000
$100,000
Payback period
4.2 years
4.4 years
4 years
Net present value discounted at 15% $(30,000)
$21,600
$15,800
Which of the above proposals generates the greatest annual cash
flow?
proposals under consideration. the accounting department has
prepared the following information"
Proposal A
Proposal B
Proposal
C
Initial investment
$3,100,000.
$2,450,000
$2,055,000
Useful life of equipment 7 years
7 years
7 years
Estimated salvage value. $0
$400,000
$100,000
Payback period
4.2 years
4.4 years
4 years
Net present value discounted at 15% $(30,000)
$21,600
$15,800
Which of the above proposals generates the greatest annual cash
flow?