ABC Company is considering two alternative investment projects The following information is provided Project A Initial investment $100,000 Annual net cash inflows for 4 years $35,000 Project B Initial investment $200,000 Annual net cash inflows for 7 years $40,000 The required rate of return for bo...

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ABC Company is considering two alternative investment projects. The following information is provided: Project A: Initial investment:

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ABC Company is considering two alternative investment projects. The following information is provided:

Project A:

Initial investment: $100,000
Annual net cash inflows for 4 years: $35,000

Project B:

Initial investment: $200,000
Annual net cash inflows for 7 years: $40,000

The required rate of return for both projects is 10%.

a) Calculate the net present value (NPV) of each project and advise the company on which project it should undertake.

b) What is the payback period for each project?

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Management and Cost Accounting

ISBN: 978-1473748873

10th edition

Authors: Colin Drury

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Posted Date: Feb 15, 2023 05:40 AM

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ABC Company is considering two alternative investment projects. The following information is provided: Project A: Initial investment:

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Management and Cost Accounting

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