Question
Year Cash Flow (A) Cash Flow (B) Cash Flow (C) 0 -$50,000 -$100,000 $200,000 1 $20,000 $20,000 $20,000 2 $20,000 $30,000 $200,000 3 $20,000 $40,000
| Year | Cash Flow (A) | Cash Flow (B) | Cash Flow (C) |
| 0 | -$50,000 | -$100,000 | $200,000 |
| 1 | $20,000 | $20,000 | $20,000 |
| 2 | $20,000 | $30,000 | $200,000 |
| 3 | $20,000 | $40,000 | $0 |
| 4 | $20,000 | $50,000 | $0 |
Assume that the 0-year payments are installation costs, and the remaining entries are net incomes for the next four years
Which project should be chosen according to the payback period method?
calculate AAR and NPV for each method.
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Essential Personal Finance A Practical Guide For Students
Authors: Lien Luu, Jonquil Lowe, Jason Butler, Tony Byrne
1st Edition
1138692956, 978-1138692954
