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Investment A: Year: 0 1 2 3 4 5 Cash flow: ($14,000) $6,000 $6,000 $6,000 $6,000 $6,000 Investment B: Year: 0 1 2 3 4
| Investment A: | ||||||
| Year: | 0 | 1 | 2 | 3 | 4 | 5 |
| Cash flow: | ($14,000) | $6,000 | $6,000 | $6,000 | $6,000 | $6,000 |
| Investment B: | ||||||
| Year: | 0 | 1 | 2 | 3 | 4 | 5 |
| Cash flow: | ($15,000) | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| Investment C: | ||||||
| Year: | 0 | 1 | 2 | 3 | 4 | 5 |
| Cash flow: | ($18,000) | $12,000 | $2,000 | $2,000 | $2,000 | $2,000 |
The cash flows for three projects are shown above. The cost of capital is 9.5%. If an investor decided to take projects with a payback period two years or less, which of these projects would he take?
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Financial Times Handbook Of Corporate Finance A Business Companion To Financial Markets Decisions And Techniques
Authors: Glen Arnold
2nd Edition
0273726560, 978-0273726562
