Question
Lobers, Inc., has two investment proposals, which have the following characteristics: PROJECT A PROJECT B PERIOD COST PROFIT AFTER TAXES NET CASH FLOW COST PROFIT
Lobers, Inc., has two investment proposals, which have the following characteristics:
PROJECT A | PROJECT B | |||||
PERIOD | COST | PROFIT AFTER TAXES | NET CASH FLOW | COST | PROFIT AFTER TAXES | NET CASH FLOW |
0 | $9,000 | – | – | $12,000 | – | – |
1 | $1,000 | $5,000 | $1,000 | $5,000 | ||
2 | 1,000 | 4,000 | 1,000 | 5,000 | ||
3 | 1,000 | 3,000 | 4,000 | 8,000 | ||
For each project, compute its payback period, its net present value, and its profitability index using a discount rate of 15 percent.
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Fundamentals Of Financial Management
Authors: James Van Horne, John Wachowicz
13th Revised Edition
978-0273713630, 273713639
