Page 1 of 1
A random company wants to invest in two projects where the cash flow is shown here: Points in time (yearly interval) 0 1
Posted: Wed May 18, 2022 11:51 pm
by answerhappygod
- A Random Company Wants To Invest In Two Projects Where The Cash Flow Is Shown Here Points In Time Yearly Interval 0 1 1 (57.29 KiB) Viewed 33 times
A random
company wants to invest in two projects where the cash flow is shown here: Points in time (yearly interval) 0 1 2 3 4 Project A (£) -60,000 30,000 22,500 21,000 9,000 Project B (£) - 60,000 7,500 22,500 27,500 30,000 The rate of return is 15% and the two projects are exclusive. (a) Use the sample payback method to let the
company know which project should be taken. Assuming the threshold figure is set to be 3 years. (b) Use the net present value (NPV) approach to advise the
company on which project should be taken (if any).