Regular payback period, Financial Management

The director of capital budgeting for a firm has recognized two mutually exclusive projects, A and B, with the following expected net cash flows:

 

                                                                                                   Expected Net Cash Flows

                                                                Year                       Project A                                             Project B

                                                                  0                              ($100)                                 ($100)

                                                                  1                                  70                                                     10

                                                                  2                                  50                                                     60

                                                                  3                                  20                                                     80

 

Together of the projects have a cost of capital of 14 percent.

 

(i) What is the regular payback period (in years) for Project B?

(ii) What is Project A's net present value (NPV)?

 

 

 

 

 

 

 

 

 

Posted Date: 3/26/2013 7:55:00 AM | Location : United States







Related Discussions:- Regular payback period, Assignment Help, Ask Question on Regular payback period, Get Answer, Expert's Help, Regular payback period Discussions

Write discussion on Regular payback period
Your posts are moderated
Related Questions
Define the terms- Mergers and takeovers The terms takeovers and mergers are inter-related. When a company attains the majority of shares of another company, acquired company is

Case Study: Silicon Cliffs is a big private company that undertakes consultancy activities and services in the field of building construction. Silicon Cliffs has gained peoples

Accountants should not reverse the adjustment of prepaid insurance to recognize insurance expense at the end of the accounting period because: Answer a. . doing so results in

DIY Inc. plans to raise $200,000 with a right offering. The current stock price is $100 and there are 80,000 shares outstanding. a. If DIY sets the subscription price to be $80

In addition to the public pension plans, Rob and Ellen also have RRSPs.  What options will they have when they retire if they want to draw money from their RRSPs?  Identify one str

Q. Is Conservatism an investment strategy? Conservatism - An investment strategy aimed at long-term capital appreciation with low risk; moderate; cautious; opposite of aggressi

Step 1) Opportunity Set Graph:Combine 2 of your stocks (Ignore the other 2 stocksfor this step only).  Construct an investment opportunity set (the curved set) between the two risk

Determine the advantages of explicit cost Explicit cost of an interest bearing debt will be the discount rate which equates present value of the contractual future payments of

What are the primary requirements for a successful JIT inventory control system? For a JIT system to be victorious the supplier must be willing and able to deliver materials im

How Howan acquisition should be implemented 1. Directors of the target company must be approached first and a firm offer of a price made on condition that all due diligence wor