Author Question: Ambinu Flower Company provides flowers and other nursery products for decorative purposes in medium ... (Read 45 times)

tichca · **on:** Mar 6, 2021

Question 1

Supply the missing data for each of the following proposals:

	Proposal A	Proposal B	Proposal C
Initial investment	(a)	$62,900	$226,000
Annual net cash inflow	$60,000	(c)	(e)
Life, in years	10	6	10
Salvage value	$0	$10,000	$0
Payback period in years	(b)	(d)	5.65
Internal rate of return	12%	24%	(f)

Question 2

Ambinu Flower Company provides flowers and other nursery products for decorative purposes in medium to large sized restaurants and businesses. The company has been investigating the purchase of a new specially equipped van for deliveries. The van has a value of $133,750 with a six-year life. The expected additional cash inflows are $52,500 per year. What is the payback period for this investment?
◦ 1.5 years
◦ 2.5 years
◦ 6 years
◦ 3.5 years

peilian · **Reply #1 on:** Mar 6, 2021

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