Question
Q1 Mr Ali has an option of investing in one project from the proposed three different projects. The initial investment and cash flows are given
Q1Mr Ali has an option of investing in one project from the proposed three different projects. The initial investment and cash flows are given below
years
Cf - project 1
Cf - project 2
Cf - project 3
0
(10,000)
(28,000)
(22,000)
1
1000
3000
4000
2
880
7000
1000
3
6000
8000
1000
4
4000
12000
9000
5
2000
7500
11500
6
3650
6400
8900
a.Calculate payback for all three projects
b.Calculate discounted payback for all three projects
c.Calculate NPV for all three projects
d.Calculate profitability index for all three projects
e.Calculate IRR for all three projects
f.write a detailed comment on which project Mr Ali must invest on the basis of above calculated criteria's and why he must ignore the other projects.
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Financial Management For Decision Makers
Authors: Peter Atrill
7th Edition
129201606X, 978-1292016061
