Question
ABC Tech is considering two investment projects with the following cash flows. The companys required rate of return is 14%. Year Project X1 Project Y1
ABC Tech is considering two investment projects with the following cash flows. The company’s required rate of return is 14%.
Year | Project X1 | Project Y1 |
0 | -$150,000 | -$180,000 |
1 | $50,000 | $60,000 |
2 | $55,000 | $70,000 |
3 | $60,000 | $80,000 |
4 | $70,000 | $90,000 |
a. Calculate the payback period for each project. b. Compute the net present value (NPV) and determine which project is more viable.
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College Accounting Chapters 1-27
Authors: James A. Heintz, Robert W. Parry
22nd Edition
130566616X, 978-1305666160
