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Question Two Disney Company is evaluation two projects for it's investment. The data related to these projects is summarized below: Project A Cost of
Question Two Disney Company is evaluation two projects for it's investment. The data related to these projects is summarized below: Project A Cost of Equipment $300,000 Useful life of equipment 5 years with no salvage Annual net cash Inflow $80,000 Project B Cost of Equipment $200,000 Useful life 3 years with no salvage value Net Cash Inflow: year 2 is $120,000, year 1 is $80,000, year 3 is $60,000 Discount Rate for this company is 10%. Required: Rank the two projects using following methods: 1. Net Present Value (NPV) Ranking: 1- 2- 2. Profitability Index Ranking: 1- 2- 3. Payback Period: Ranking: 1- 2- 149-66080
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