Question
Capital Budgeting: The great project you would like to pitch to senior management (Project X) is up against Project Y. You need to calculate the
Capital Budgeting: The great project you would like to pitch to senior management (Project X) is up against Project Y. You need to calculate the payback period, NPV, IRR, and MIRR for both projects to determine whether you can make a case for Project X after all. Both projects have an initial cash outflow of $1,500,000. Discount rate is 8.89% which is also WACC. Reinvestment rate is 4%.
Cash inflows for each project are below.
| Year | Project X | Project Y |
| 1 | 500,000 | 750,000 |
| 2 | 500,000 | 500,000 |
| 3 | 750,000 | 350,000 |
| 4 | 750,000 | 500,000 |
| 5 | 350,000 | 750,000 |
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Financial Literacy And Money Script A Caribbean Perspective
Authors: Christine Sahadeo
1st Edition
3319770748, 978-3319770741
