Question
Kimpling is considering three projects. The cash flows for each are shown in the following table. The firm has a 15% cost of capital, and
Kimpling is considering three projects.
The cash flows for each are shown in the following table.
The firm has a 15% cost of capital, and each projects initial investment amounts to $42,000.
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Calculate each projects payback period and indicate which project is preferred
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Calculate each projects NPV and indicate which project is preferred.
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Which project would you recommend?
| Cash inflows | |||
| Year | Project A | Project B | Project C |
| 1 | $13,100 | $7,500 | $18,000 |
| 2 | $13,100 | $9,700 | $15,000 |
| 3 | $13,100 | $14,200 | $14,000 |
| 4 | $13,100 | $15,500 | $11,000 |
| 5 | $13,100 | $19,300 | $8,000 |
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Business Statistics Communicating With Numbers
Authors: Sanjiv Jaggia, Alison Kelly
2nd Edition
0078020557, 978-0078020551
