Question: can someone answer this question with formulas, but not with excel. thumbs up will be given. Assume that the required yearly return of both projects
can someone answer this question with formulas, but not with excel. thumbs up will be given.
Assume that the required yearly return of both projects are 5%. a) Calculate the payback period of the two projects. Given the target payback period is 3 years, which project should the company choose? Explain your answer. (4 marks) b) Calculate the discount payback period of the two projects. Given the target payback period is 4 years, which project should the company choose? Explain your answer. (6 marks) c) Calculate the NPV of the two projects. Which project should the company choose? Explain your answer. (6 marks) d) Based on your answers in parts (a) (c), which project should the company choose? Explain, (3 marks) e) Instead of choosing one out of the two projects, Silicon Co. has just realized that they can implement projects A and B simultaneously if they install a new machine. The installation cost is $200,000. Explain whether Silicon Co. should install this new machine. (Hint: Justify your answer base on the NPV of the two projects.)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
