Top Posters
Since Sunday
a
5
k
5
c
5
B
5
l
5
C
4
s
4
a
4
t
4
i
4
r
4
r
4
Home Q & A Board Other Fields Homework Help Business Finance
New Topic  
regina nana regina nana
wrote...
Go to Answer
Posts: 501
Rep: 7 0
4 years ago
A convenience store owner is contemplating putting a large neon sign over his store. It would cost $50,000, but is expected to bring an additional $24,000 of profit to the store every year for five years. Would this project be worthwhile if evaluated using a payback period of two years or less and if the cost of capital is 10%?

▸ Yes, since the cash flows after two years are greater than the initial investment.

▸ Yes, since the value of the cash flows into the store, in present dollars, are greater than the initial investment.

▸ Yes, since it will pay back its initial investment in two years.

▸ No, since the value of the cash flows over the first two years are less than the initial investment.
Textbook 
Fundamentals of Corporate Finance

Fundamentals of Corporate Finance


Edition: 2nd
Authors:
Read 133 times
1 Reply
Replies
Answer verified by a subject expert
christinaalexchristinaalex
wrote...
#1
Posts: 393
Rep: 59 0
4 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
1

Related Topics

regina nana Author
wrote...

4 years ago
You make an excellent tutor!
cartoon
wrote...

Yesterday
This helped my grade so much Perfect
big_larry_samp
wrote...

2 hours ago
Good timing, thanks!
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  1378 People Browsing
 126 Signed Up Today
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 1047
  
 232
  
 1004