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Case 2. Consider the following three projects: Year Alpha Beta Gamma 0 -1000 -100 -500 1 600 -200 200 2 400 100 250 3 100
Case 2.
Consider the following three projects:
Year | Alpha | Beta | Gamma |
0 | -1000 | -100 | -500 |
1 | 600 | -200 | 200 |
2 | 400 | 100 | 250 |
3 | 100 | 150 | 250 |
4 | 50 | 100 | 200 |
5 | 0 | 100 | 100 |
6 | 0 | 100 | -100 |
The cost of capital for the company is 12%.
- If you apply the payback criterion, which project will you choose? Why?
- If you apply the NPV criterion, which project will you choose? Why?
- If you apply the IRR criterion, which project will you choose? Why?
- If you apply the profitability index criterion, which project will you choose? Why?
use excel please and an organized answer.
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