Consider the following investment projects using the information in Table P5.25.

(a) Compute the future worth at the end of life for each project at i = 10%.
(b) Determine the discounted payback period for each project.
(c) Compare the area of negative project balance for each project.
(d) Which project would you prefer and why?

Transcribed Image Text:

TABLE P5.25 n 0 1 2 3 A - $1,000 0 0 1,965 Project's Cash Flow B C -$1,000 -$1,000 594 594 594 687 588 487 D -$1,000 500 600 700