Question: Cash Flow Analysis (in $) Year Project U Project V 0 -35,000 -40,000 1 6,000 7,000 2 8,000 9,000 3 10,000 11,000 4 12,000 13,000
Cash Flow Analysis (in $)
Year | Project U | Project V |
0 | -35,000 | -40,000 |
1 | 6,000 | 7,000 |
2 | 8,000 | 9,000 |
3 | 10,000 | 11,000 |
4 | 12,000 | 13,000 |
Requirements:
- Calculate the payback period for each project.
- Select the project if the standard payback period is 3 years.
- Compute the discounted payback period at an 8% discount rate.
- Compute the IRR for each project.
- Recommend the project based on IRR.
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