Question
Year Project A Project B 0 -$30,000 -$35,000 1 $8,000 $10,000 2 $9,000 $11,000 3 $10,000 $12,000 4 $11,000 $13,000 5 $12,000 $14,000 (a) Calculate
Year | Project A | Project B |
0 | -$30,000 | -$35,000 |
1 | $8,000 | $10,000 |
2 | $9,000 | $11,000 |
3 | $10,000 | $12,000 |
4 | $11,000 | $13,000 |
5 | $12,000 | $14,000 |
(a) Calculate the payback period for each project. (b) Compute the NPV using a discount rate of 12%. (c) Determine the IRR for both projects. (d) Which project should be chosen if mutually exclusive? (e) Decision if the projects are independent?
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Fundamental accounting principle
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
21st edition
978-0078025587
