Question
I need help with this problem. Can you please help me? I also don't know how to calculate in excel spreadsheet. You require a return
I need help with this problem. Can you please help me? I also don't know how to calculate in excel spreadsheet.
- You require a return of 11 percent on your investments.Consider the following two mutually-exclusive projects:
Year Cash Flow (A) Cash Flow B
0 -455,000 -65,000
1 58,000 31,000
2 85,000 28,000
3 85,000 25,500
4 572,000 19,000
a) If you apply the payback criterion, which investment will you choose?Why? b) If you apply the discounted payback criterion, which investment will you choose?Why? c) If you apply the NPV criterion, which investment will you choose?Why? d)If you apply the IRR criterion, which investment will you choose?Why? e) If you apply the profitability index criterion, which investment will you choose?Why? f) Based on your answers in (a) through (e), which project should you finally choose?Why?
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