BBB Inc. wants to invest in a new project but it needs your support in analyzing the mutually exclusive projects with the following cash flows. Year CF Project-A CF Project-B 0 $ -150,000 $ -100,000 1 90,000 -50,000 2 80,000 65,000 3 70,000 75,000 4 60,000 85,000 5 50,000 95,000 a) Find the payback period and discounted payback period (required rate of return is 12 percent). b) At what required rate of return the NPV for both projects will be same?

Answer rating: 100% (QA)

a To find the payback period calculate the time it takes for the initial investment to be recovered ... View the full answer