Question
Sustainable Innovations is considering two eco-friendly projects. The required return is 13%. Year Project Green Project Clean 0 $(85,000) $(95,000) 1 $20,000 $25,000 2 $25,000
Sustainable Innovations is considering two eco-friendly projects. The required return is 13%.
Year | Project Green | Project Clean |
0 | $(85,000) | $(95,000) |
1 | $20,000 | $25,000 |
2 | $25,000 | $30,000 |
3 | $28,000 | $35,000 |
4 | $30,000 | $40,000 |
a. Compute the payback period for each project. Which project is preferable based on this criterion?
b. Calculate the net present value for each project. Which project should be selected based on the NPV?
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Managerial Accounting
Authors: Jennifer Cainas, Celina J. Jozsi, Kelly Richmond Pope
1st Edition
9780137689453
