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Business, 07.12.2019 05:31 katherine78

Carr company is considering two capital investment proposals. estimates regarding each project are provided below:

project soup project nuts
initial investment $400,000 $600,000
annual net income 30,000 46,000
net annual cash inflow 110,000 146,000
estimated useful life 5 years 6 years
salvage value -0- -0-
the company requires a 10% rate of return on all new investments.

present value of an annuity of 1
periods 9% 10% 11% 12%
5 3.890 3.791 3.696 3.605
6 4.486 4.355 4.231 4.111
the annual rate of return for project soup is

7.5%.

27.5%.

55%.

15.0%.

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Answers: 1

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