Simms Manufacturing is considering two alternative investment proposals with the following data:
$$\begin{array} { | l | l | l | }
\hline & \text { Proposal X } & \text { Proposal Y } \
\hline \text { Investment } & \$ 620,000 & \$ 400,000 \
\hline \text { Useful life } & 8 \text { years } & 8 \text { years } \
\hline \begin{array} { l }
\text { Estimated annual net } \
\text { cash inflows for 8 years }
\end{array} & \$ 130,000 & \$ 80,000 \
\hline \text { Residual value } & & \
\hline \text { Depreciation method } & \$ 60,000 & \$ 0 \
\hline \text { Required rate of return } & \text { Straight-line } & \text { Straight-line } \
\hline
\end{array}$$ Note: Present value and future value tables are needed.
What is the total present value of future cash inflows from Proposal X?

Question

Simms Manufacturing is considering two alternative investment proposals with the following data:
$$\begin{array} { | l | l | l | } 
\hline & \text { Proposal X } & \text { Proposal Y } \
\hline \text { Investment } & \$ 620,000 & \$ 400,000 \
\hline \text { Useful life } & 8 \text { years } & 8 \text { years } \
\hline \begin{array} { l } 
\text { Estimated annual net } \
\text { cash inflows for 8 years }
\end{array} & \$ 130,000 & \$ 80,000 \
\hline \text { Residual value } & & \
\hline \text { Depreciation method } & \$ 60,000 & \$ 0 \
\hline \text { Required rate of return } & \text { Straight-line } & \text { Straight-line } \
\hline
\end{array}$$ Note: Present value and future value tables are needed.
What is the total present value of future cash inflows from Proposal X?

Quizplus · Accepted Answer

The Answer of Simms Manufacturing is considering two alternative investment proposals with the following data:
$$\begin{array} { | l | l | l | } 
\hline & \text { Proposal X } & \text { Proposal Y } \
\hline \text { Investment } & \$ 620,000 & \$ 400,000 \
\hline \text { Useful life } & 8 \text { years } & 8 \text { years } \
\hline \begin{array} { l } 
\text { Estimated annual net } \
\text { cash inflows for 8 years }
\end{array} & \$ 130,000 & \$ 80,000 \
\hline \text { Residual value } & & \
\hline \text { Depreciation method } & \$ 60,000 & \$ 0 \
\hline \text { Required rate of return } & \text { Straight-line } & \text { Straight-line } \
\hline
\end{array}$$ Note: Present value and future value tables are needed.
What is the total present value of future cash inflows from Proposal X?

Simms Manufacturing Is Considering Two Alternative Investment Proposals with the Following