Each of the following alternatives involves an initial outlay of BD 50,000. Their cash flows go...

 

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Each of the following alternatives involves an initial outlay of BD 50,000. Their cash flows go as follows: [10 marks] Year 1 2 3 Alternative F 10,000 10,000 10,000 10,000 10,000 Alternative H 10,000 4,000 15,000 17,000 20,000 Alternative G 5,000 10,000 12,000 22,000 24,000 Required: Estimate and rank each alternative based on the following: 1- Evaluate the above projects using payback period method. 2- Evaluate the above projects using net present value (NPV) (use 11% discount rate). 3- Evaluate the above projects using profitability index method. (2 marks) (6 marks) (2 marks) Each of the following alternatives involves an initial outlay of BD 50,000. Their cash flows go as follows: [10 marks] Year 1 2 3 Alternative F 10,000 10,000 10,000 10,000 10,000 Alternative H 10,000 4,000 15,000 17,000 20,000 Alternative G 5,000 10,000 12,000 22,000 24,000 Required: Estimate and rank each alternative based on the following: 1- Evaluate the above projects using payback period method. 2- Evaluate the above projects using net present value (NPV) (use 11% discount rate). 3- Evaluate the above projects using profitability index method. (2 marks) (6 marks) (2 marks)

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To evaluate the alternatives using different methods lets calculate the payback period net present value NPV and profitability index for each alternative 1 Payback Period Method The payback period is ... View the full answer