Question
URGENT PLEASE XYZ Co is looking at four different opportunities. Each opportunity requires the same initial investment of $110,000. Below is the cashflow for each
URGENT PLEASE
XYZ Co is looking at four different opportunities.
Each opportunity requires the same initial investment of $110,000.
Below is the cashflow for each investment:
Year | Opportunity 1 | Opportunity 2 | Opportunity 3 | Opportunity 4 |
1 | $15,000 | $80,000 | $40,000 | $0 |
2 | 25,000 | 30,000 | 40,000 | 5,000 |
3 | 35,000 | 50,000 | 40,000 | 50,000 |
4 | 45,000 | 0 | 40,000 | 60,000 |
5 | 55,000 | 0 | 0 | 65,000 |
Evaluate opportunities 1-4 by the following:
a) payback period (show years and months as applicable)
b) net present value (use a 10% discount rate) - Round your answers to the nearest dollar (no decimals)
c) internal rate of return - required rate is 15%
Rank each opportunity by each evaluation technique (a, b, c), rank them 1-4. 1 being the best opportunity and 4 being the worst.
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