Find the payback period irr-npv, Business Economics

Assignment Help:

Your company's cost of capital is 12%. You are currently evaluating three projects that have the following cash flow streams:

Project

0

1

2

3

4

A

-10,000

4,000

4,000

4,000

4,000

B

-10,000

0

0

0

50,000

C

-1,000

500

500

500

500

a. Find the payback period, discounted payback period, IRR, and NPV for each of the three projects.

b. Use the payback period to evaluate options A and B. Which would you choose according to this method? Why does payback period give the wrong answer? 

c. Suppose projects A and C are mutually exclusive. Use the IRR to establish which of the two you should undertake. Why does IRR give the wrong answer? 

d. Determine whether Project A or C should be undertaken using incremental IRR. 

 

 


Related Discussions:- Find the payback period irr-npv

The fit stop, Summary Strategy management Variables Rewards

Summary Strategy management Variables Rewards

Competitive market, You are given the following functions in a fully compet...

You are given the following functions in a fully competitive market: Market demand function: Qd = 20 – 3P Market supply function: Qs = 4 + P Where P is price A) In which price s

How is the equality of income distribution measured, How is the equality of...

How is the equality of income distribution measured? The Gini coefficient is a statistical type measure of income distribution. This Gini coefficient is: • 0, which impl

What is rostowís model, What is Rostowís model? Rostowís Stages of Gro...

What is Rostowís model? Rostowís Stages of Growth model argues to attain modernity all countries pass through similar stages of development as explained as follows: a. Sta

What are the major problems in measuring national income, What are the majo...

What are the major problems in measuring national income? The major problems in measuring national income: a. Unreliable statistics data collection is costly and the figu

Business cycle, Analyse the effect of contraction phase to the vulnerable s...

Analyse the effect of contraction phase to the vulnerable society

What are economic sectors, What are economic sectors? For the function...

What are economic sectors? For the functions of analysis the production of goods and services can be classified in four groupings as given below: a. Primary sector b. Se

Opportunity cost and sunk cost, as mention above, the physical demand for g...

as mention above, the physical demand for gold rises in india during late summer and the beginning of fall.what situation occurs at the end of the year?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd