Haq Electronics can make either of two investments at time 0. Assuming a required rate...
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Accounting
Haq Electronics can make either of two investments at time 0. Assuming a required rate of return of 14 percent, determine for each project (a) the payback period, (b) the net present value, (c) the profitability index, and (d) the internal rate of return. The initial investments required and yearly cashflows are shown below:
| END OF YEAR | ||||||||
| PROJECT | INVESTMENT | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
| A | 28000 | 7,184 | 8,326 | 8,326 | 6,377 | 6,376 | 5,828 | 5,280 |
| B | 20000 | 4,660 | 5,476 | 5,266 | 4,743 | 5,403 | 5,012 | 4,620 |
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