Consider the following mutually exclusive projects:ProjectsC? (?)C? (?)C? (?)C? (?)C? (?)A-8,0004,0003,0002,00010,000B-10,0003,0003,0004,0006,000C-7,0002,0003,5002,5005,000D-5,0002,0002,5003,0003,500Required:Calculate the payback period for...
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Accounting
Consider the following mutually exclusive projects:
Projects | C? (?) | C? (?) | C? (?) | C? (?) | C? (?) |
A | -8,000 | 4,000 | 3,000 | 2,000 | 10,000 |
B | -10,000 | 3,000 | 3,000 | 4,000 | 6,000 |
C | -7,000 | 2,000 | 3,500 | 2,500 | 5,000 |
D | -5,000 | 2,000 | 2,500 | 3,000 | 3,500 |
Required:
- Calculate the payback period for each project.
- If the standard payback period is 3 years, which project will you select?
- Compute the NPV of each project if the cost of capital is 8%. Which project will you recommend based on NPV?
- Calculate the IRR for each project.
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