Consider the following projects with their respective cash flows:YearProject XProject YProject ZInitial Outlay-$50,000-$45,000-$55,000Year 1$15,000$12,000$18,000Year 2$15,000$12,000$18,000Year...
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Accounting
Consider the following projects with their respective cash flows:
Year | Project X | Project Y | Project Z |
Initial Outlay | -$50,000 | -$45,000 | -$55,000 |
Year 1 | $15,000 | $12,000 | $18,000 |
Year 2 | $15,000 | $12,000 | $18,000 |
Year 3 | $15,000 | $12,000 | $18,000 |
Year 4 | $15,000 | $12,000 | $18,000 |
Required:
- Calculate the payback period for each project.
- Compute the discounted payback period at a discount rate of 8%.
- Determine the NPV for each project.
- Find the IRR for each project.
- Rank the projects based on their profitability index and recommend the best project.
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