Question
Year Project A Project B 0 -$10,000 -$12,000 1 $3,000 $4,000 2 $4,000 $5,000 3 $5,000 $6,000 4 $6,000 $7,000 (a) Calculate the payback period
Year | Project A | Project B |
0 | -$10,000 | -$12,000 |
1 | $3,000 | $4,000 |
2 | $4,000 | $5,000 |
3 | $5,000 | $6,000 |
4 | $6,000 | $7,000 |
(a) Calculate the payback period for each project. (b) Compute the NPV for each project using a discount rate of 9%. (c) Determine the IRR for each project. (d) Choose the better project if they are mutually exclusive.
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Introduction To Financial Accounting
Authors: Anne Marie Ward, Andrew Thomas
7th edition
77138449, 978-0077132682, 77132688, 978-0077138448
