Consider the following cash flows of two mutually exclusive projects of Chinese Daily News Year New Sunday
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Question:
Consider the following cash flows of two mutually exclusive projects of Chinese Daily News
Year New Sunday Early Edition New Saturday Late Edition
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$ $
$ $
$ $
a Based on the payback period rule, which project should be chosen?
b Suppose there is no corporate tax and the cash flows above are income before the depreciation. The firm uses a straightline depreciation method ie equal amounts of depreciation in each year What is the average accounting return for each of these two projects?
c Which project has a greater IRR?
d Base on the incremental IRR rule, which project should be chosen?
Related Book For
College Algebra
ISBN: 978-0134697024
12th edition
Authors: Margaret L. Lial, John Hornsby, David I. Schneider, Callie Daniels
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