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Question 2: Table 2 Investment Project A (RM) Project B (RM) Initial outflows 100,000 120,000 Inflows at end of year 1 40,000 50,000 N 60,000
Question 2: Table 2 Investment Project A (RM) Project B (RM) Initial outflows 100,000 120,000 Inflows at end of year 1 40,000 50,000 N 60,000 40,000 3 3 15,000 30,000 5,000 5,000 Required: a. Find the payback periods for Projects A and B b. Which of these projects would the firm choose, based on the payback period alone? c. Discuss one non-financial factor that might influence the decision makers to choose a project that has a longer payback period? (1+1+1 = 3 marks)
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