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Question 2 (26 marks) A&B Enterprises is trying to select the best investment from two alternatives. Cash flows for each alternative are: Initial outlay $
Question 2 (26 marks) A&B Enterprises is trying to select the best investment from two alternatives. Cash flows for each alternative are: Initial outlay $ $ 93,000 $ 93,000 Year 1 2 3 4 5 Investment A Investment B $7,000 $63,000 $25,000 $47,000 $33,000 $40,000 $72,000 0 $69,000 For each of the investments, calculate the following (use a 10% discount rate): (a) Payback period (b) Internal rate of return (c) For each method individually, which is the better investment
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