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
By classifying by function Under this format, the expenses of the company are classified into 5 major categories i.e. Cost of sales [(opening stock + purchases – closing st

Four major qualitative characteristics of accounting information There are four major qualitative characteristics which influence usefulness of accounting information. Additio

RECEIVING ORDER It includes five main important points as follows: Effect of receiving order: The consequences of the making of the receiving order are:The debtor retain

Americans With Disabilities Act - ADA  legislation passed in 1990 that bans discrimination against people who are having disabilities. According to this Act, discrimination against

TERMINATION OF APPOINTMENTS A trustee may cease to hold office in the following ways: (a) Disclaimer : At any time before acceptance of the trusts. (b) Retirement : Eith

Part I: Wal-Mart Stores Inc.'s income statement and balance sheet are attached. Gather relevant information from the financial statements to calculate the financial ratios, and co

Q. Decisions about managerial remuneration packages? In recent years there has been an improved emphasis on decisions about managerial remuneration packages being removed from

1.what are the various fields of accounting and how do they differ? 2. how are revenues and expenses affect the owners' equity account? 3. why are revenues and expenses recor

Dietz&Dow Industries (DDI) makes an unexpected takeover bid for Hein & Hillgen Instruments (HHI). DDI offers to pay $50 per share of HHI, which represents a 25% premium over the pr

The Budvar Company purchases parts from a foreign customer on December 1, Year 1, with payment of 20,000 crowns 20,000 crowns to be made on March 1, Year 2.  Budvar enters into a f