Cooper Corporation must evaluate two capital expenditure proposals. Cooper's hurdle rate is 10%. Data for the two proposals follow. Proposal Proposal X $120,000 $120,000 24,000 Required investment Annual after-tax cash inflows After-tax cash inflows at the end of years 3, 6, 9, and 12 Life of project What is the cash payback period for Proposal X? For Proposal Y? Hint: For Proposal Y, in what year (3, 6, 9 or 12) will the full original investment be recovered? Round Proposal X answer to one decimal place, if applicable. Proposal X years Proposal Y 72,000 12 years 12 years years
Cooper Corporation must evaluate two capital expenditure proposals. Cooper's hurdle rate is 10%. Data for the two proposals follow. Proposal Proposal X $120,000 $120,000 24,000 Required investment Annual after-tax cash inflows After-tax cash inflows at the end of years 3, 6, 9, and 12 Life of project What is the cash payback period for Proposal X? For Proposal Y? Hint: For Proposal Y, in what year (3, 6, 9 or 12) will the full original investment be recovered? Round Proposal X answer to one decimal place, if applicable. Proposal X years Proposal Y 72,000 12 years 12 years years
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 10P: Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year...
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