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establish project payback time MPM 581 Basic Project Financial Management & Cost Estimating Tools Practical Examples Workshop 1 Please carry out the following basic tasks

establish project payback time
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MPM 581 Basic Project Financial Management & Cost Estimating Tools Practical Examples Workshop 1 Please carry out the following basic tasks to give you some practical insight into the use of common project financial management and cost estimating tools and techniques. EXERCISE 1) Establish project payback time Example Project: Initial investment in Year 0 $34000 Payback Year 1 $11780 ($34000 - $11780) $ 22220 left to pay Year 2 $14760 ($22220 - $14760) $7460 left to pay Year 3 $11680 ($7460/$11680) 0.64 The investment will be paid back in 2.64 years (in approximately the month of July 0.64x12 =7.68) Your task is to analyse the following four projects and determine which one will achieve payback the fastest. Project 1 YEAR O Nm 0 1 2 3 4 PROJECT A 16000 4600 5300 7000 5500 Project 2 YEAR PROJECT B 22000 12400 9000 9570 10100 0 1 2 3 4 2 Project 3 YEAR o 1 2 3 4 PROJECT C 31400 12600 8400 14480 10300 Project 4 YEAR 0 1 2 3 4 PROJECT D 12500 4200 3890 6000 5800 Which project will achieve payback in the fastest time

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