A firm is considering an investment of $250,000 in either project C or project D with the
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Question:
A firm is considering an investment of $250,000 in either project C or project D with the following expected cash flows:
Year | Project C | Project D |
1 | $80,000 | $20,000 |
2 | $80,000 | $60,000 |
3 | $80,000 | $120,000 |
4 | $80,000 | $100,000 |
5 | $80,000 | $50,000 |
The discount rate is 15%.
Required: a. Determine for each project:
- Simple payback period
- Discounted payback period
- Net present value
- Internal rate of return
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