Question
A company has $220,000 to invest in either Project I or Project J, with the following cash flows: Year Project I Project J 1 $40,000
A company has $220,000 to invest in either Project I or Project J, with the following cash flows:
Year | Project I | Project J |
1 | $40,000 | $20,000 |
2 | $40,000 | $30,000 |
3 | $40,000 | $40,000 |
4 | $40,000 | $50,000 |
5 | $40,000 | $60,000 |
The cost of capital is 9%.
Required: a) Determine for each project:
- Simple payback period
- Discounted payback period
- Net present value
- Internal rate of return
- Profitability index
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Business Statistics
Authors: Robert A. Donnelly
2nd Edition
0321925122, 978-0321925121
