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Initial fixed capital investment is 1 000 000 ECU in both A and B projects to be selected. The useful life of project A is 5 years, Project B is 8 years. Annual net cash flows are shown below. Make the project selection using this data and based on the payback period. If the income they will bring during their useful life in both projects is taken into account, will there be a change in preference? NNA values, ECU/VI for projects A and B Yhar Proje A Project B 0-1.000.000 -1 000 000 2 3 4 4567 7 8 500 000 300 000 200 000 100 00 50 000 0 0 0 100 000 200 000 300 000 400 000 500 000 600 000 700 000 Initial fixed capital investment is 1 000 000 ECU in both A and B projects to be selected. The useful life of project A is 5 years, Project B is 8 years. Annual net cash flows are shown below. Make the project selection using this data and based on the payback period. If the income they will bring during their useful life in both projects is taken into account, will there be a change in preference? NNA values, ECU/VI for projects A and B Yhar Proje A Project B 0-1.000.000 -1 000 000 2 3 4 4567 7 8 500 000 300 000 200 000 100 00 50 000 0 0 0 100 000 200 000 300 000 400 000 500 000 600 000 700 000
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To determine the payback period for each project we need to calculate the cumulative net cash flow f... View the full answer
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date:
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