Question
Two mutually exclusive projects are under consideration with the details shown. The company's required rate of return for projects of this risk level is
Two mutually exclusive projects are under consideration with the details shown. The company's required rate of return for projects of this risk level is 15%. using this information, answer the questions below: Year Project A Project B 0 (390,000) (62,000) 1 58,000 28,000 234 72,000 26,000 99,000 25,000 444,000 18,600 A) Calculate the payback period for each project. Round to two decimals. Project A Project B B) Based on the result of the payback calculation, which project would you recommend? Answer with the letter A or B only. C) Calculate the Net Present Value for each project. Round to no decimals and do not enter dollar signs or commas.
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Principles of Finance
Authors: Scott Besley, Eugene F. Brigham
6th edition
9781305178045, 1285429648, 1305178041, 978-1285429649
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