Question
Initial Investment Year 1 Year 2 Year 3 Year 4 Year 5 7,000 1,500 2,000 2,500 3,000 3,500 9,000 2,000 2,500 3,000 3,500 4,000 11,000
Initial Investment | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
£7,000 | £1,500 | £2,000 | £2,500 | £3,000 | £3,500 |
£9,000 | £2,000 | £2,500 | £3,000 | £3,500 | £4,000 |
£11,000 | £2,500 | £3,000 | £3,500 | £4,000 | £4,500 |
Requirements:
- Calculate the Payback Period for each project.
- Determine the NPV at a discount rate of 8%.
- Evaluate the IRR for each project.
- Compare the ROI for each project.
- Analyze the sensitivity of the NPV to changes in the discount rate.
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Management Accounting
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
6th Canadian edition
013257084X, 1846589207, 978-0132570848
