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The table below gives the initial investment (the negative numbers at Year 0) for two projects. Compute the payback period, the NPV, and the IRR
The table below gives the initial investment (the negative numbers at "Year 0") for two projects. Compute the payback period, the NPV, and the IRR using Excel. Then rank the two projects based on each of these three criteria. Should any of the projects be funded?
I'm struggling with these formulas, can you please show how you did it?
Firm Cost of Capital 11%
Year Project A Project B
0 -100,000 -150,000
1 25,000 30,000
2 25,000 30,000
3 25,000 90,000
4 25,000 20,000
5 25,000 20,000
6 25,000 20,000
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