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Calculate the payback period

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Question 1 - A company is considering two projects that require the same initial investment. Project A has an NPV of $333,000 and a 3-year payback period. Project B has an NPV of $339,000 and a payback period of 4.5 years. Which project would you choose?

Question 2 - A company is considering investing in a wind turbine to generate its own power. Any unused power will be sold back to the local utility company. Between cost savings and new revenues, the company expects to generate $200,000 per year in net cash inflows from the turbine. The turbine would cost $2 million and is expected to have a 20-year useful life with no residual value. Calculate the payback period.

Reference no: EM133157680

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