Question
Will is trying to select the best investment from among 3 alternatives. Each alternative involves an initial outlay of 100,000$. Their cash flows returns for
Will is trying to select the best investment from among 3 alternatives. Each alternative involves an initial outlay of 100,000$. Their cash flows returns for each project are as follows (in $): year project A project B project C 1 30,000 0 40,000 2 30,000 0 40,000 3 30,000 50,000 40,000 4 30,000 50,000 0 5 30,000 60,000 0 a) Which project would be selected if the payback method is used? b) Which project would be selected if the net present value is used at a 5% discount rate? c) Which project would be selected if the net present value is used at a 10% discount rate?
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