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please help ASAP We have two five-year investment projects Alfa and Beta. The initial expenditure on the project Alfa is equal to 500 000 PLN
please help ASAP
We have two five-year investment projects Alfa and Beta. The initial expenditure on the project Alfa is equal to 500 000 PLN and positive cash flows are equal to 600 000 PLN at the beginning of second, third and fifth year. The initial expenditure on the project Beta is equal to 900 000 PLN and positive cash flows are equal to 700 000 PLN at the end of first, second, fourth and fifth year. The discount rate and the reinvestment rate are equal to 8.0% p.a. Calculate:
- The net present value for both projects, (4 points)
- The discounted payback period for both projects, (4 points)
- The profitability index for both projects, (4 points)
- The modified rate of return for both projects, (4 points)
- Which project should the company choose. (2 points)
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