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Modern Tech ltd. is considering two projects. Both the projects would require an initial investment of $100,000 and have a useful life of 4 years.
Modern Tech ltd. is considering two projects. Both the projects would require an initial investment of $100,000 and have a useful life of 4 years. The first project A would have cash flow of $33,000 in each of the four years. The second project B would have cash flow of $29,000 in the first year, $37,000 in the second year, $46,000 in the third year and $31000 in the fourth year. This projects are mutually exclusive. determine which one should Modern Tech ltd. choose, according to Payback period, NPV and IRR method? Consider the company has a cost of capital at 11%
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