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Your company is analyzing two different projects: Year Project Alpha Project Beta 0 -$90,000 -$90,000 1 $20,000 $0 2 $20,000 $0 3 $20,000 $0 4
Your company is analyzing two different projects:
Year | Project Alpha | Project Beta |
0 | -$90,000 | -$90,000 |
1 | $20,000 | $0 |
2 | $20,000 | $0 |
3 | $20,000 | $0 |
4 | $20,000 | $0 |
5 | $20,000 | $150,000 |
Requirements:
- Calculate the NPV at a discount rate of 9%.
- Compute the IRR for both projects.
- Determine the Payback Period for each project.
- Explain which project is more desirable and why.
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Managerial Accounting
Authors: Karen W. Braun, Wendy M. Tietz
7th Edition
0137858515, 9780137858514
