Question
A company is evaluating two projects, Q and R. Project Q costs $4,000 and generates $1,500 annually for 4 years. Project R costs $3,500 and
A company is evaluating two projects, Q and R. Project Q costs $4,000 and generates $1,500 annually for 4 years. Project R costs $3,500 and returns $1,300, $1,400, $1,500, and $1,600 over 4 years.
- Calculate the NPV for both projects using a 9% discount rate.
- Determine the IRR for each project.
- Illustrate the payback period for both projects.
- Recommend which project to choose based on NPV and IRR.
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Introduction To Financial Accounting
Authors: Anne Marie Ward, Andrew Thomas
7th edition
77138449, 978-0077132682, 77132688, 978-0077138448
