1. Beta Investments

Scenario: Investment Appraisal

Data: Beta Investments is considering two investment projects with the following cash flows:

Project A:

• Initial Investment: $500,000
• Year 1 Cash Flow: $150,000
• Year 2 Cash Flow: $200,000
• Year 3 Cash Flow: $250,000

Project B:

• Initial Investment: $700,000
• Year 1 Cash Flow: $180,000
• Year 2 Cash Flow: $190,000
• Year 3 Cash Flow: $200,000

Requirements: Calculate the Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period for each investment project assuming a discount rate of 10%. Analyze and compare the investment attractiveness of Project A and Project B based on the appraisal methods. Discuss the financial criteria and non-financial factors that Beta Investments should consider in its investment decision-making process.