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Salam Company has $1,800,000 to invest and wishes to evaluate the following three projects. Years X($) Y($) Z($) 0 840,000 900,000 900,000 1 300,000 540,000
Salam Company has $1,800,000 to invest and wishes to evaluate the following three projects.
Years X($) Y($) Z($)
0 840,000 900,000 900,000
1 300,000 540,000 600,000
2 300,000 120,000 260,000
3 300,000 240,000 300,000
4 300,000 360,000
Cost of Capital 10% 10% 10%
Required:
1-Which project(s) would you recommend using:
a.Payback Period (PP)
b.Net Present Value (NPV)
c.Profitability Index (PI)
The internal rate of return (IRR) (hint: use 23%)
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