Question
Pound Industries is attempting to select the best of three mutually exclusive projects. The initial investment and after-tax cash inflows associated with these projects are
Pound Industries is attempting to select the best of three mutually exclusive projects. The initial investment and after-tax cash inflows associated with these projects are shown in the following table.
| Cash flows | Project A | Project B | Project C | ||||
| Initial investment (CF) | $170,000 | $200,000 | $190,000 | ||||
| Cash inflows (CF), t=1 to 5 | $50,000 | $62,000 | $62,500 | ||||
a.Calculate the payback period for each project.
b.Calculate the net present value (NPV) of each project, assuming that the firm has a cost of capital equal to
14%.
c.Calculate the internal rate of return (IRR) for each project.
d.Indicate which project you would recommend.
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Restoring Demand In The World Economy Trade Finance And Technology
Authors: Joseph Halevi, Jean-Marc Fontaine
1st Edition
1858984580, 9781858984582
