151 a 550 000 capital investment proposal has an estimated life of four years and no 4298857
151. A $550,000 capital investment proposal has an estimated life of four years and no residual value. The estimated net cash flows are as follows:
|
Year |
Net Cash Flow |
|
Year |
Net Cash Flow |
|
1 |
$300,000 |
|
3 |
$208,000 |
|
2 |
280,000 |
|
4 |
180,000 |
|
|
|
|
|
|
152. Sunrise Inc. is considering a capital investment proposal that costs $227,500 and has an estimated life of four years and no residual value. The estimated net cash flows are as follows:
|
Year |
Net Cash Flow |
|
1 |
$97,500 |
|
2 |
$80,000 |
|
3 |
$60,000 |
|
4 |
$40,000 |
|
|
|
153. The net present value has been computed for Proposals P and Q. Relevant data are as follows:
|
|
Proposal P |
Proposal Q |
|
Amount to be invested |
$265,000 |
$450,000 |
|
Total present value of net cash flow |
296,500 |
425,000 |
|
Net present value |
21,500 |
(20,000) |
|
|
|
|
Determine the present value index for each proposal.