Assume that your company is considering two projects A and B for possible funding. Project A investment
Fantastic news! We've Found the answer you've been seeking!
Question:
Assume that your company is considering two projects A and B for possible funding. Project ‘A’ investment of $399,760 that will last for five years and the after-tax cash flow of $100,000 each year. Project ‘B’ investment of $600,376 that will last for seven years and the after-tax cash flow of $140,000 each year. The WACC is five percent. Determine the net present value, undiscounted (simple) pay-back, and the profitability index (PI) for each project. Which project should the company adopt? Please show the calculation.
Related Book For
Posted Date: