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  3. project alpha: initial cost ?10,000, yearly return

Project Alpha: Initial cost ?10,000, yearly returns ?2,000, ?3,000, ?4,000, ?6,000.Project Beta: Initial cost ?12,000,...

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Accounting

  • Project Alpha: Initial cost ?10,000, yearly returns ?2,000, ?3,000, ?4,000, ?6,000.
  • Project Beta: Initial cost ?12,000, yearly returns ?3,000, ?3,000, ?5,000, ?5,000.
  • Project Gamma: Initial cost ?8,000, yearly returns ?2,000, ?2,500, ?3,000, ?4,000.
  • Project Delta: Initial cost ?6,000, yearly returns ?1,500, ?2,000, ?3,500, ?4,500.

Required:

  1. Calculate the payback period for each project.
  2. Select the project if the standard payback period is 3 years.
  3. Compute the NPV for each project using a 9% discount rate.
  4. Determine the IRR for each project.
  5. Provide a recommendation based on NPV and IRR.

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