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Consider the following two projects: a ) What is the Payback period for each project? Give your decision if the target or required PBP is
Consider the following two projects:
a What is the Payback period for each project? Give your decision if the target or required
PBP is years.
b What is the NPV for each project assume project Alpha has a required rate of return of
and project Beta a required rate of return of
c What is the IRR for each project?
d These projects are mutually exclusive meaning if you accept one of them, you do not
accept the other even if both projects are acceptable Which project would you recommend
your company accept? Why? Is there a conflict between the capital budgeting criteria? Why?
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