Question: The following data are given for two mutually exclusive project proposals: (PhP) Project A Project B Initial Investment 50,000.00 60,000.00 Annual Net Cash Inflows: Year
The following data are given for two mutually exclusive project proposals:
| (PhP) | Project A | Project B |
| Initial Investment | 50,000.00 | 60,000.00 |
| Annual Net Cash Inflows: | ||
| Year 1 | 15,000.00 | 30,000.00 |
| Year 2 | 14,000.00 | 14,000.00 |
| Year 3 | 12,000.00 | 10,000.00 |
| Year 4 | 12,000.00 | 10,000.00 |
| Year 5 | 12,000.00 | 10,000.00 |
Assuming that the firms required rate of return is 20%, compute the following:
a) Net Present Value
b) Payback Period
Which project would you undertake? Justify
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