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Calculate the payback period for your company for Assets A and B using the data in Table 1, and answer the following questions: Based on
Calculate the payback period for your company for Assets A and B using the data in Table 1, and answer the following questions:
Based on the calculations, do any of the assets increase shareholders wealth? Which investment would you accept, if any?
Which will recoup the initial investment more rapidly?
Calculate the NPV, IRR, and break-even point.
Discuss which asset you will invest in, if any, and explain your decision.
\begin{tabular}{|c|c|c|} \hline Assets & Asset A & Asset B \\ \hline Initial Investment & $840,000 & $900,000 \\ \hline Year & Cash Inflows & Cash Inflows \\ \hline 1 & $280,000 & $560,000 \\ \hline 2 & $280,000 & $240,000 \\ \hline 3 & $280,000 & $200,000 \\ \hline 4 & $280,000 & $200,000 \\ \hline 5 & $280,000 & $200,000 \\ \hline \end{tabular} Asset A Asset B \begin{tabular}{|c|c|c|} \hline Assets & Asset A & Asset B \\ \hline Initial Investment & $840,000 & $900,000 \\ \hline Year & Cash Inflows & Cash Inflows \\ \hline 1 & $280,000 & $560,000 \\ \hline 2 & $280,000 & $240,000 \\ \hline 3 & $280,000 & $200,000 \\ \hline 4 & $280,000 & $200,000 \\ \hline 5 & $280,000 & $200,000 \\ \hline \end{tabular} Asset A Asset B
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