Baltusrol Inc. has the following three investment opportunities. A P70,000 10,000 Initial investment Initial working capital required Cash inflows by year: Year 1 P70,000 P70,000 8,000 5,000 P35,000 35,000 10,000 5,000 8.000 P83.000 P1,250 P35,000 10,000 45.000 20,000 2.000 P112,000 P10,000 P4,000 8,000 10,000 98,000 5,000 P125.000 P12,500 Year 2 Year 3 Year 4 Released working capital Total Average annual income Required: 1. Rank the investment opportunities in order of desirability using. A. Payback period. B. Average book rate of return (use average net book value of the investment as the denominator), and C. NPV using a 16% discount rate. Dotermine the proftabiahy indoy for each d rank the invostmonts based on these valuns

Baltusrol Inc. has the following three investment opportunities. A P70,000 10,000 Initial investment Initial working capital required Cash inflows by year: Year 1 P70,000 P70,000 8,000 5,000 P35,000 35,000 10,000 5,000 8.000 P83.000 P1,250 P35,000 10,000 45.000 20,000 2.000 P112,000 P10,000 P4,000 8,000 10,000 98,000 5,000 P125.000 P12,500 Year 2 Year 3 Year 4 Released working capital Total Average annual income Required: 1. Rank the investment opportunities in order of desirability using. A. Payback period. B. Average book rate of return (use average net book value of the investment as the denominator), and C. NPV using a 16% discount rate. Dotermine the proftabiahy indoy for each d rank the invostmonts based on these valuns

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.3.2P

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