Question
You are the Chief Financial Officer at Infosys Ltd., which is considering the following two mutually exclusive projects. All amounts are in indian rupees. Year
You are the Chief Financial Officer at Infosys Ltd., which is considering the following two mutually exclusive projects. All amounts are in indian rupees.
| Year | Cashflow (Project A) | Cashflow (Project B) |
| 0 | -50,00,000 | -42,00,000 |
| 1 | 2100000 | 1800000 |
| 2 | 1800000 | 800000 |
| 3 | 1500000 | 600000 |
| 4 | 1000000 | 1300000 |
| 5 | 750000 | 2100000 |
Whichever project you choose, if any, you require a 16 percent return on your investment.
a. If you apply the payback criterion, which investment will you choose? Why? b. If you apply the discounted payback criterion. which mvestment will you choose? Why? c. If you apply the NPV criterion, which investment will you choose? Why? d. Based on your answers in (a) through (c), which project will you finally choose?
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Practical Auditing Techniques For ISO/TS 16949
Authors: Raymond Ness
1st Edition
978-0595273126
