Question: Using the data in the tables below, answer the following questions: Calculate the NPV for each project. Show your work. Calculate the pay-back period for
Calculate the NPV for each project. Show your work.
Calculate the pay-back period for each project. Show your work.
Calculate the IRR for each project. Show your work.
Which project would the company select using the NPV method? Explain your answer.
Which project would the company select using the pay-back period? Explain your answer.
Which project would the company select using the IRR method? Explain your answer.
Year | Project #1 | Project #2 | Project #3 |
0 | ($30,000) | ($32,000) | ($35,000) |
1 | $11,000 | $15,000 | $11,000 |
2 | $11,000 | $14,000 | $11,000 |
3 | $11,000 | $11,000 | $11,000 |
4 | $11,000 | $2,000 | $11,000 |
5 | $11,000 | $500 | $11,000 |
| Required Rate of Return |
1 | 5% |
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To calculate the NPV for each project we need to discount the cash flows to present value using the required rate of return of 5 For Project 1 Year 1 ... View full answer
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