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Projects and Cash Flows (in ): Projects C C C C C E -15,000 5,000 3,000 2,000 10,000 F -20,000 6,000 4,000 5,000 8,000 G
Projects and Cash Flows (in ₹):
Projects | C₀ | C₁ | C₂ | C₃ | C₄ |
E | -15,000 | 5,000 | 3,000 | 2,000 | 10,000 |
F | -20,000 | 6,000 | 4,000 | 5,000 | 8,000 |
G | -10,000 | 2,500 | 3,500 | 1,500 | 4,500 |
H | -5,000 | 1,500 | 1,000 | 2,000 | 3,000 |
Required:
- Calculate the payback period for each project.
- If the standard payback period is 3 years, which project will you select?
- If the cost of capital is 12%, compute the discounted payback period for each project.
- Compute the NPV of each project and determine which project to recommend based on the NPV criterion.
- Calculate the profitability index (PI) for each project.
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