Question
A company is considering two mutually exclusive projects. The projected cash flows are as follows: Year Cash Flows A Cash Flows B 0 -$245,000 -$250,000
A company is considering two mutually exclusive projects. The projected cash flows are as follows:
| Year | Cash Flows A | Cash Flows B |
| 0 | -$245,000 | -$250,000 |
| 1 | $70,500 | $60,000 |
| 2 | $85,000 | $60,000 |
| 3 | $90,000 | $70,000 |
| 4 | $125,000 | $110,000 |
a) The companys required rate of return is 8%. Which project, if either, should the company choose?
b) What is the discounted payback period for each?
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School Finance And Business Management Optimizing Fiscal Facility And Human Resources
Authors: Craig A. Schilling, Daniel R. Tomal
2nd Edition
1475844026, 978-1475844023
