Use the Following Information for Questions 112-115 $\text { The company requires a } 10 \% \text { rate of return on all new investments. }$

question 107

Multiple Choice

Use the following information for questions 112-115.
Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below: $\begin{array}{lrr}&\text { Project Soup }&\text { Project Nuts }\\ \text { Initial investment } & \$ 400,000 & \$ 600,000 \\\text { Annual net income } & 30,000 & 46,000 \\\text { Net annual cash inflow } & 110,000 & 146,000 \\\text { Estimated useful life } & 5 \text { years } & 6 \text { years } \\\text { Salvage value } & -0- & -0-\end{array}$

$\text { The company requires a } 10 \% \text { rate of return on all new investments. }$

$\text { Present Value of an Annuity of } 1$
$\begin{array}{lllll}\text { Periods } & 9 \% & 10 \% & 11 \%& 12 \%\\5 & 3.890 & 3.791 & 3.696 & 3.605 \\6 & 4.486 & 4.355 & 4.231 & 4.111\end{array}$
-The cash payback period for Project Nuts is

• A) 13.3 years.
• B) 6.7 years.
• C) 5.0 years.
• D) 4.1 years.

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Definitions:

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A meeting in February 1945 between the leaders of the Allied powers (the United States, the United Kingdom, and the Soviet Union) during World War II to plan the final defeat and occupation of Nazi Germany.