BUS 278 WEEK 4 MID TERM EXAM QUESTION 11 100% CORR

BUS 278 WEEK 4 MID TERM EXAM QUESTION 11 100% CORRECT 
TCO 6 Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below.
 
 	Project Soup	Project Nuts
Initial Investment	$600,000	$900,000
Annual Net Income	$30,000	$63,000
Annual Cash Inflow	$150,000	$213,000
Salvage Value	$0	$0
Estimated Useful Life	5 years	6 years

 
The company requires a 10% rate of return on all new investments.
 
Part (a): Calculate the payback period for each project.
Part (b): Calculate the net present value for each project.
Part (c): Which project should Carr Company accept and why?

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