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The Global Logistics Solutions company aims to evaluate its available investments. In particular, there are four different available investments (A-D) with the following information regarding

The Global Logistics Solutions company aims to evaluate its available investments. In particular, there are four different available investments (A-D) with the following information regarding the estimated cash flows:

Year

Investment A

Investment B

Investment C

Investment D

0

-70.000,00

-60.000,00

-70.000,00

-70.000,00

1

25.000,00

15.000,00

0,00

0,00

2

25.000,00

15.000,00

0,00

0,00

3

25.000,00

15.000,00

50.000,00

0,00

4

25.000,00

15.000,00

50.000,00

20.000,00

5

25.000,00

0,00

50.000,00

140.000,00

It is considered that acceptable investment is any investment which has a payback period less than 4 years.

Using this information, you are required to:

  1. Calculate the Simple Payback period for all the investments. Then you are required to evaluate which of the investments should be considered as acceptable. (15%)
  2. Rank the investments based on the Simple Payback Method (5%)

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