Each of the following alternatives involves an initial outlay of BD 90,000. Their cash flows go...
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Each of the following alternatives involves an initial outlay of BD 90,000. Their cash flows go as follows: [10 marks] Year 1 2 4 5 Alternative L 30,000 30,000 30,000 30,000 30,000 Alternative M 22,000 25,000 31,000 34,000 30,000 Alternative N 16,000 28,000 35,000 40,000 42,000 Required: Estimate and rank each alternative based on the following: A-Evaluate the above projects using payback period method. B-Evaluate the above projects using net present value (NPV) (use 6% discount rate). C-Evaluate the above projects using profitability index method. Each of the following alternatives involves an initial outlay of BD 90,000. Their cash flows go as follows: [10 marks] Year 1 2 4 5 Alternative L 30,000 30,000 30,000 30,000 30,000 Alternative M 22,000 25,000 31,000 34,000 30,000 Alternative N 16,000 28,000 35,000 40,000 42,000 Required: Estimate and rank each alternative based on the following: A-Evaluate the above projects using payback period method. B-Evaluate the above projects using net present value (NPV) (use 6% discount rate). C-Evaluate the above projects using profitability index method.
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Answer rating: 100% (QA)
A Payback period method Alternative L Payback period 2 years since cumulative cash flows cross 900... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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