Grayson Company Is Considering Two New Projects Each Requiring an Equipment

question 152

Essay

Grayson Company is considering two new projects each requiring an equipment investment of $72000. Each project will last for three years and produce the following annual net income.
$\begin{array} { c r r } \text { Year } & { \text { TIP } } & { \text { TOP } } \\1 & \$ 8,000 & \$ 9,000 \\2 & 9,000 & 9,000 \\3 & 14,000 & 9,000\end{array}$ The equipment will have no salvage value at the end of its three-year life. Grayson Company uses straight-line depreciation. Grayson requires a minimum rate of return of 12%. Present value data are as follows: Instructions
(a) Compute the net present value of each project.
(b) Which project should be selected? Why?

Describe the geographic distribution of mineral resources in Canada and the significance of the Canadian Shield.

Recognize the potential environmental benefits of alternative materials and technologies over traditional metal mining.

Understand the relationship between mining practices, recycling measures, and the extension of depletion time for mineral resources.

Understand different organizational models and their communication characteristics.

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Definitions:

Pineal Gland

Endocrine gland located in the brain.

Cerebral Cortex

The outer layer of neural tissue of the cerebrum of the brain, playing a key role in memory, attention, perception, cognition, awareness, thought, language, and consciousness.

Limbic System

A complex system of nerves and networks in the brain, involved with instinct and mood. It controls the basic emotions and drives.

Long-Term Potentiation

An enduring increase in signal transmission between two neurons that results from stimulating them synchronously; essential for learning and memory.