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The BBC company wants to acquire another company at a cost of $100,000. The new company will add cash flows of $20,000 in year 1,
The BBC company wants to acquire another company at a cost of $100,000. The new company will add cash flows of $20,000 in year 1, $40,000 in year 2, $30,000 in year 3, $30,000 in year 4 and $40,000 in year 5. Assuming BBC has a discount rate of 10% and a payback requirement of 3.75 years, should the company do the investment according to simple payback, NPV and IRR (prove your answer)?
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