Question
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of both
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of both of their risk class is 12 percent, and that the maximum allowable payback and discounted payback statistic for the projects are 2 and 3 years, respectively.
| Time: | 0 | 1 | 2 | 3 |
| Project A Cash Flow | -29,000 | 19,000 | 39,000 | 10,000 |
| Project B Cash Flow | -39,000 | 19,000 | 29,000 | 59,000 |
Use the PI decision rule to evaluate these projects; which one(s) should it be accepted or rejected?
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Ouch What You Dont Know About Money And Why It Matters More Than You Think
Authors: Paul Knott
1st Edition
0133527077,0273788752
