Use net present value and payback period method, Financial Accounting

Given the following cash flows for projects A and B:

  Year     Project A   Project B

    0       -100,000     -150,000   (Project Cost)

    1         25,000         50,000

    2         30,000         60,000

    3         35,000         70,000

    4         80,000         50,000

Assume that the cost of capital is 10%.

a. Use the net present value method to select the better of the two projects.

b. Use the payback period method to select the better of the two projects.

c. How does the IRR method differ from the above two?

Posted Date: 2/28/2013 5:02:07 AM | Location : United States







Related Discussions:- Use net present value and payback period method, Assignment Help, Ask Question on Use net present value and payback period method, Get Answer, Expert's Help, Use net present value and payback period method Discussions

Write discussion on Use net present value and payback period method
Your posts are moderated
Related Questions

define the term of pre-acquisition diviend

Igor and Angela were married in 2005, separated in 2011, and divorced recently. At the time of marriage, each had some investments and personal assets. They both worked during the

How would the following errors affect the account balances and the basic accounting equation: assets = liabilities + owners' equity? How do the misstatements affect income? 1. The

Balance Sheet Preparation with a Missing Element The following data are available for Schubert Products Inc. as of December 31, 2012. Cash . . . . . . . . . . . . . . . . . . . . .

1) Inventory of raw material are held to make sure that the production process is not disrupted because of shortage of raw material. The amount of raw material inventory would base

Individuals commonly prefer possession of cash immediately or in the present moment quite than the same amount at any time in the future. Such time preference is fundamentally due

Greek Debt Exchange On the evening of February 20, 2012 private institutional investors, representatives of the IMF, ECB, and European governments agreed to a major "intervention"

Q. What do you mean by depreciation? What are the causes for depreciation? Explain the two methods of depreciation. Depreciation means a fall in the quality, quantity or value o

what is use of accounting ratios?