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Period 0 1 2 3 4 5 6 7 8 9 10 11 PBP NPV IRR Project A $ (1,000,000) $ 200,000 $ 200,000 $

Period 0 1 2 3 4 5 6 7 8 9 10 11 PBP NPV IRR
Project A $ (1,000,000) $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 400,000
Project B $ (1,000,000) $ 500,000 $ 500,000 $ 500,000
Project C $ (80,000) $ 1,040 $ 9,456 $ 11,405 $ 18,567 $ 47,453 $ 6,394 $ 45,727 $ 51,933 $ 85,625
Project D $ (400,000) $ 4,161 $ 37,824 $ 45,618 $ 74,269 $ 189,812 $ 25,577 $ 182,907 $ 207,733 $ 342,499
Project E $ (17,000) $ 16,000 $ 16,000 $ (16,000) $ 16,000 $ (52,000)
Project F $ (5,000) $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000
Project G $ (5,000) $ - $ - $ - $ - $ 15,000
Project H $ (20,000) $ 7,000 $ 7,000 $ 7,000 $ 7,000 $ 7,000

Answer the question below contains a list of available investment projects and their respective cash flows. Using a cost of capital of 10%,

  1. Find the payback period, net present value and internal rate of return for each project.
  2. Based on the results, identify conflicts in ranking the above projects based on the IRR and NPV approaches, i.e. a project that has a higher rank using IRR but a lower rank using NPV and vice versa. You should also provide a discussion of what caused the conflict
  3. Provide a discussion of the advantages and disadvantages of all the capital budgeting techniques covered in this course, and identify methods to overcome the disadvantages (if available)
  4. Provide a brief discussion (a small paragraph) of the practicality (uses in real life) of the different capital budgeting methods.

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