Net Present Value Analysis Hermson Company must evaluate two capital expenditure proposals Hermson's hurdle rate is 12%. Data for the two proposals follow Proposal Proposal Required investment Annual after-tax cash inflows After cas cash nows at the end of years 16% and 12 Life of project inical outflows PV of future cash flown Using net present value analysis, which proposal is the more attractive? Do not use negative signs with your answers. Round PV answers to the nearest whole number. Use rounded answers for subsequent calculation of net present value Proposal X Proposal Y Net present value 1 $ 01 D 05 Which proposal is more attractive? $630,000 $40.000 148.500 0 D 445,500 12 years 12 years
Net Present Value Analysis Hermson Company must evaluate two capital expenditure proposals Hermson's hurdle rate is 12%. Data for the two proposals follow Proposal Proposal Required investment Annual after-tax cash inflows After cas cash nows at the end of years 16% and 12 Life of project inical outflows PV of future cash flown Using net present value analysis, which proposal is the more attractive? Do not use negative signs with your answers. Round PV answers to the nearest whole number. Use rounded answers for subsequent calculation of net present value Proposal X Proposal Y Net present value 1 $ 01 D 05 Which proposal is more attractive? $630,000 $40.000 148.500 0 D 445,500 12 years 12 years
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 4PB
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