Alpha Tech Corp. is evaluating two potential projects, both requiring an initial investment of $50,000....

80.2K

Verified Solution

Question

Accounting

Alpha Tech Corp. is evaluating two potential projects, both requiring an initial investment of $50,000. The after-tax cash inflows for each project are as follows:

Year

Cash Flows (Project A)

Cash Flows (Project B)

0

-50,000

-50,000

1

15,000

20,000

2

15,000

20,000

3

15,000

20,000

4

20,000

10,000

a. Calculate the payback period for Project A and Project B. b. Which project should Alpha Tech Corp. invest in if the cost of capital is 6%? Show the NPV calculations.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students