Question
The following projects have been proposed: Year Project A Project B Project C 0 -$5,000 -$6,000 -$4,000 1 $2,000 $2,500 $1,500 2 $2,000 $2,500 $1,500
The following projects have been proposed:
Year | Project A | Project B | Project C |
0 | -$5,000 | -$6,000 | -$4,000 |
1 | $2,000 | $2,500 | $1,500 |
2 | $2,000 | $2,500 | $1,500 |
3 | $2,000 | $2,500 | $1,500 |
4 | $2,000 | $2,500 | $1,500 |
a) Calculate the NPV for each project at an 8% discount rate. b) Calculate the payback period for each project. c) Which project should be accepted if the firm requires a payback period of no more than 3 years?
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Accounting What The Numbers Mean
Authors: David Marshall
13th Edition
1264126743, 9781264126743
