Question
PQR Services is considering two projects with the following projected cash flows. The required rate of return is 11%. Year Project K1 Project L1 0
PQR Services is considering two projects with the following projected cash flows. The required rate of return is 11%.
Year | Project K1 | Project L1 |
0 | -$150,000 | -$170,000 |
1 | $40,000 | $45,000 |
2 | $50,000 | $55,000 |
3 | $60,000 | $65,000 |
4 | $70,000 | $75,000 |
a. Calculate the payback period for each project. b. Compute the NPV and decide which project should be undertaken.
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Foundations of Finance The Logic and Practice of Financial Management
Authors: Arthur J. Keown, John D. Martin, J. William Petty
8th edition
132994879, 978-0132994873
