Question
Orange Company is considering investing P80,000 for a required return of 10%. It is choosing from the following perspective projects: Expected earnings after year Project
Orange Company is considering investing P80,000 for a required return of 10%. It is choosing from the following perspective projects:
| Expected earnings after year | Project A | Project B |
| 1 | 25,000,000 | 8,000,000 |
| 2 | 32,000,000 | 24,000,000 |
| 3 | 40,000,000 | 32,000,000 |
| 4 | 24,000,000 | 48,000,000 |
| 5 | 16,000,000 | 32,000,000 |
Calculate the payback ratio for both perspective projects
Calculate the net present value for both prospective projects
Assuming that Projects A and B are independent projects, and the firm has only P100,000, which project should the firm push through and why?
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Excel For Accountants Tips, Tricks & Techniques
Authors: Conrad Carlberg
1st Edition
1932925015, 9781932925012
