Question
MNO Enterprises is considering two investment opportunities. The cash flows for each are provided below. The discount rate is 9%. Year Project Z Project Y
MNO Enterprises is considering two investment opportunities. The cash flows for each are provided below. The discount rate is 9%.
Year | Project Z | Project Y |
0 | -$70,000 | -$80,000 |
1 | $20,000 | $25,000 |
2 | $25,000 | $30,000 |
3 | $15,000 | $20,000 |
4 | $10,000 | $15,000 |
a. Compute the payback period for each project. b. Calculate the NPV and recommend which project should be undertaken.
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Financial Accounting
Authors: David Spiceland, Wayne Thomas, Don Herrmann
4th edition
1259307956, 978-1259307959
