The American Pharmaceutical Company (APC) has a policy thait all capital investm
ID: 1155699 • Letter: T
Question
The American Pharmaceutical Company (APC) has a policy thait all capital investments must have a three year or less discounted payback period in order to be corsid red trtning The MARR at ARC ito% meet this benchmark lor funding? per year, isthe pred desated here able to End of Year Cash 25.000 $00,000 $85,000 Click the icon to-ths itee-and arnuitytatie for discrete compordeg when the MARR is 10% per 380,000 85,000 The payback period is years (Round to the nearest whole mumber The project the benchmark does riot meet Enter your answer in the answer boxExplanation / Answer
Year Cash flows PVF @ 10% Present value Cumulative Cash flows 0 -285000 1 -285000 -285000 1 -25000 0.909091 -22727.3 -307727 2 60000 0.826446 49586.78 -258140 3 165000 0.751315 123966.9 -134174 4 240000 0.683013 163923.2 29749.68 5 360000 0.620921 223531.7 253281.4 6 85000 0.564474 47980.28 301261.6 7 85000 0.513158 43618.44 344880.1 8 85000 0.466507 39653.13 384533.2 9 85000 0.424098 36048.3 420581.5 Payback = 3 years + (134174/163923) = 3.82 years The Payback periiod is 3.82 years The project does not meet the becnchmark
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