Question
Tech Innovators Inc. is planning to invest in two new software projects. The required rate of return is 10%. Year Project 1 Project 2 0
Tech Innovators Inc. is planning to invest in two new software projects. The required rate of return is 10%.
Year | Project 1 | Project 2 |
0 | $(50,000) | $(60,000) |
1 | $15,000 | $20,000 |
2 | $18,000 | $25,000 |
3 | $20,000 | $30,000 |
4 | $25,000 | $35,000 |
a. Determine the payback period for each project. Based on this period, which project is preferred?
b. Compute the net present value for each project. Based on NPV, which project should be undertaken?
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Horngrens Accounting
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura
11th edition
978-0133851151, 013385115X, 978-0133866889
