There are a senior manager at Zambia Airways and have beenauthorized to spend up to K400,000 FOR THE PROJECTS. The threeprojects you are considering have the fillowing characterics;
| Project | Details |
| Project A | Intial investment of K280,000 .Cash flow of K190,000 at year 1and K 170,000 at yr 2. This is a plant expansion project |
| Project B | Intial investment of K390,000. Cash flow of K270,000 at year 1and K 240,000 at year 2. this is a new product developmentproject |
| Project C | Intial investment of K230,000. Cash flow of K160,000 at year 1and K190,000 at year 2. this is a market expansion project |
Assume the corporate discount rate is 10%, please offer yourrecommedations by ranking the projects, backed by your analysisusing:
a) Net Present Value
b) Profitabilty Index
c) payback period
d) Chritique the flaws of each technique
