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  1. business
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  3. consider the following projects with respective ca

Consider the following projects with respective cash flows:Project X: Initial investment of ?9,000, with returns...

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Question

Accounting

Consider the following projects with respective cash flows:

  • Project X: Initial investment of ?9,000, with returns of ?2,000, ?3,000, ?4,000, and ?5,000 over the next four years.
  • Project Y: Initial investment of ?11,000, with returns of ?3,000, ?3,500, ?4,000, and ?6,000.
  • Project Z: Initial investment of ?7,000, with returns of ?2,000, ?2,500, ?3,000, and ?3,500.

Required:

  1. Calculate the payback period for each project.
  2. Determine which project meets a standard payback period of 3 years.
  3. Compute the NPV for each project at a 12% discount rate.
  4. Calculate the IRR for each project.
  5. Discuss the projects based on both NPV and IRR criteria.

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