Using the data in the tables below, answer the following questions: Calculate the NPV for each project.
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Question:
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% |
Related Book For
Applied Regression Analysis and Other Multivariable Methods
ISBN: 978-1285051086
5th edition
Authors: David G. Kleinbaum, Lawrence L. Kupper, Azhar Nizam, Eli S. Rosenberg
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