Question: If Company A was considering two separate projects, each with an initial required investment of $ 350,000 and with anticipated returns as follows, 1)what is
If Company A was considering two separate projects, each with an initial required investment of $ 350,000 and with anticipated returns as follows,
1)what is the payback period of each?
2)What is NPV of each.
Project 1 YEAR 1 - 130,000 YEAR 2 - 120,000 YEAR 3 -100,000 YEAR 4 -90,000
Project 2 YEAR 1 - 110,000 YEAR 2 - 110,000 YEAR 3- 110,000 YEAR 4- 110,000
Show your work.
What a recommendations for each of the projects 1 and 2 .
(a) Analyze the projects in terms of the payback period as well as their NPV.
b) In addition, what the recommendations would be if the projects are independent or if they are mutually exclusive.
(c) the recommendations if Company A has unlimited funding or if it is exercising capital rationing.Be specific and detailed.
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