Question: Compute Discounted Payback (DPB) for both projects (A and B). Based on the DPB method, which project should the company accept if they are mutually
- Compute Discounted Payback (DPB) for both projects (A and B). Based on the DPB method, which project should the company accept if they are mutually exclusive projects.
| Year | Project A CFs | Project B CFs |
| 0 (NINV) | -100,000 | -100,000 |
| 1 | $50,000 | $20,000 |
| 2 | $50,000 | $20,000 |
| 3 | $50,000 | $20,000 |
| 4 | $20,000 | $50,000 |
| 5 | $20,000 | $50,000 |
| 6 | $20,000 | $50,000 |
Cost of capital for both projects = 11%
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