Evaluate the following projects based on their cash flows:YearProject PProject QProject RInitial Outlay-$40,000-$35,000-$45,000Year 1$12,000$10,000$14,000Year 2$12,000$10,000$14,000Year...
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Accounting
Evaluate the following projects based on their cash flows:
Year | Project P | Project Q | Project R |
Initial Outlay | -$40,000 | -$35,000 | -$45,000 |
Year 1 | $12,000 | $10,000 | $14,000 |
Year 2 | $12,000 | $10,000 | $14,000 |
Year 3 | $12,000 | $10,000 | $14,000 |
Year 4 | $12,000 | $10,000 | $14,000 |
Required:
- Compute the payback period for each project.
- Determine the NPV for each project at a discount rate of 9%.
- Calculate the profitability index for each project.
- Find the IRR for each project.
- Recommend which project(s) should be accepted based on the NPV and IRR criteria.
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