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Indecisive Corp. is looking at the following three projects: Year Project X Project Y Project Z 0 $(150,000) $(220,000) $(150,000) 1 54,000 0 (80,000) 2
Indecisive Corp. is looking at the following three projects:
Year | Project X | Project Y | Project Z |
0 | $(150,000) | $(220,000) | $(150,000) |
1 | 54,000 | 0 | (80,000) |
2 | 54,000 | 0 | 95,000 |
3 | 54,000 | 115,000 | 105,000 |
4 | 54,000 | 250,000 | 140,000 |
The firm's required return is 13%
a. What is the Net Present Value (NPV) for each?
b. What is the internal rate of return (IRR) for each?
c. What is the discounted payback period (DPB) for each?
d. What project(s) should the company purchase if the projects are independent/mutually exclusive? Explain your reasoning?
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