Question 29
1.2 pts
Giraldi Company has identified that the cost of a new computer will be $48,000, but with the use of the new computer, net income will
increase by $5,000 a year. If depreciation expense is $3,000 a year, the cash payback period is:
6.0 years.
16.0 years.
9.6 years.
24.0 years.
Question 30
1.2 pts
Selma Inc. is comparing several alternative capital budgeting projects as shown below:
Projects
A
B
C
Initial investment
$80,000 $120,000 $160,000
Present value of net cash flows 90,000
110,000 200,000
Using the profitability index, the projects rank as
C, A, B.
A, C, B.
A, B, C.
C, B, A.