Two project proposals have been presented to XYZ Corporation. Project A requires an initial investment of...
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Two project proposals have been presented to XYZ Corporation. Project A requires an initial investment of Php 80,000.00 and the expected annual cash return is Php 30,000.00 for 4 years. Project B requires an initial investment of Php 60,000.00 and the expected annual cash return is Php 20,000.00 for 5 years. a. What is the payback period of each project? (4 points) b. Compute for the net present value of each project if the cost of capital is 10%. (4 points) c. Which project should XYZ Corporation accept? Why? (2 points) Two project proposals have been presented to XYZ Corporation. Project A requires an initial investment of Php 80,000.00 and the expected annual cash return is Php 30,000.00 for 4 years. Project B requires an initial investment of Php 60,000.00 and the expected annual cash return is Php 20,000.00 for 5 years. a. What is the payback period of each project? (4 points) b. Compute for the net present value of each project if the cost of capital is 10%. (4 points) c. Which project should XYZ Corporation accept? Why? (2 points)
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Answer rating: 100% (QA)
a Payback Period The payback period is the time it takes for the initial investment to be recovered from the annual cash returns For Project A Initial ... View the full answer
Related Book For
Intermediate Algebra
ISBN: 9780134895987
13th Edition
Authors: Margaret Lial, John Hornsby, Terry McGinnis
Posted Date:
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