(b) Swan fashions imposes a payback period method to its below international investment projects. If the...

Transcribed Image Text:

(b) Swan fashions imposes a payback period method to its below international investment projects. If the company has the following two projects. According to payback, which pro should be accepted, and which should be rejected? What is the payback period method, briefly explain? What is the payback criterion decisi rule? Expected word count: 150 words 0 1 2 3 4 Year 0 1 2 3 4 Cash flow (A) -$75,000 $33,000 $36,000 $19,000 $9000 Sweet memories flight school is presented with two mutually exclusive projects. The required return for both projects is 13%. Year Project A -$140,000 Cash flow (B) -$125,000 $29,000 $32,000 $35,000 $240,000 $61,500 $93,400 $68,100 $40,500 Project B -$559,000 $259,300 $168,400 $154,800 $110,400 a. What is IRR for each project? 8 marks b. What is NPV for each project? 8 marks c. What if either of the projects should the company accept? 4 marks (b) Swan fashions imposes a payback period method to its below international investment projects. If the company has the following two projects. According to payback, which pro should be accepted, and which should be rejected? What is the payback period method, briefly explain? What is the payback criterion decisi rule? Expected word count: 150 words 0 1 2 3 4 Year 0 1 2 3 4 Cash flow (A) -$75,000 $33,000 $36,000 $19,000 $9000 Sweet memories flight school is presented with two mutually exclusive projects. The required return for both projects is 13%. Year Project A -$140,000 Cash flow (B) -$125,000 $29,000 $32,000 $35,000 $240,000 $61,500 $93,400 $68,100 $40,500 Project B -$559,000 $259,300 $168,400 $154,800 $110,400 a. What is IRR for each project? 8 marks b. What is NPV for each project? 8 marks c. What if either of the projects should the company accept? 4 marks