Question
Alpha Corp evaluates the following investment proposals: Period Project AA Cost Project AA Net Cash Flow Project BB Cost Project BB Net Cash Flow 0
Alpha Corp evaluates the following investment proposals:
Period | Project AA Cost | Project AA Net Cash Flow | Project BB Cost | Project BB Net Cash Flow |
0 | 7,000 | - | 10,000 | - |
1 | 3,000 | 4,000 | 5,000 | 5,000 |
2 | 2,000 | 4,000 | 2,000 | 5,000 |
3 | 2,000 | 5,000 | 2,000 | 6,000 |
For each project, calculate the payback period, net present value, and profitability index using a discount rate of 10%.
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Management Accounting
Authors: Will Seal, Carsten Rohde, Ray Garrison, Eric Noreen
6th Edition
0077185536, 978-0077185534
