Rania Company has $260,000 to invest and wishes to evaluate the following three projects. Years A ($)
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Question:
Rania Company has $260,000 to invest and wishes to evaluate the following three projects.
Years
A ($)
B ($)
C ($)
0
(100,000)
(80,000)
(140,000)
1
40,000
40,000
30,000
2
40,000
30,000
40,000
3
40,000
20,000
60,000
4
40,000
10,000
60,000
cost of capital
15%
15%
15%
Required:
Which project(s) would you recommend using:
a.Payback Period (PP) in nominal and discounted values.
b.Net Present Value (NPV)
c.Profitability Index (PI)
d.The internal rate of return (IRR) (hint: use 2% or 25%)
Expert Answer:
Posted Date:
