Question
Your division is considering two projects. The required rate of return for both projects is 10%. Below are the cash flows of both the projects:
Your division is considering two projects. The required rate of return for both projects is 10%. Below are the cash flows of both the projects: (Note: show all computations)
| Projects | Initial investment | Year 1 | Year 2 | Year 3 | Year 4 |
| A | -$30 | $5 | $10 | $15 | $20 |
| B | -$30 | $20 | $10 | $8 | $6 |
- Calculate the Payback period and discounted payback period. Why are they different? (3 marks).
- Calculate the NPV for both the projects (4marks).
- Which projects should be accepted? (3marks).
- if both the projects are independent.
- if both projects are mutually exclusive.
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Technical Analysis For The Trading Professional Strategies And Techniques For Todays Turbulent Global Financial Markets
Authors: Constance M. Brown
2nd Edition
007175914X,0071759158
