The financial manager is evaluating two new projects. The firm has a cost of capital of 8%.
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Question:
Year | Project A (R) | Project B (R) |
---|---|---|
1 | -50,000 | -80,000 |
2 | 20,000 | 40,000 |
3 | 30,000 | 30,000 |
4 | 10,000 | 30,000 |
Calculate the payback period for both projects and which project should be selected based on the payback period.
Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
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