Use net present value and payback period method, Financial Accounting

Assignment Help:

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?


Related Discussions:- Use net present value and payback period method

What is the pretax stock compensation, Refer to the Consolidated Statements...

Refer to the Consolidated Statements of Shareholders' Equity (pp. 62-63), Consolidated Statements of Cash Flow, including an abstract from Note 2, Cash Flow Information (pp. 61 and

Flow meter in an ongoing operation, You are considering whether to replace ...

You are considering whether to replace an existing flow meter in an ongoing operation. A change in the meter will have not affect revenues but will reduce costs. The existing meter

Survivorship policy, SURVIVORSHIP POLICY The partners may take out a su...

SURVIVORSHIP POLICY The partners may take out a survivorship policy to safeguard against future cashflow problems incase a partner dies or the business is dissolved. E.g. incas

Assessment, Write down what processes and data you would analyse when looki...

Write down what processes and data you would analyse when looking at the following scenarios and write down any improvements you could include to ensure that the problem would be l

Balance sheet, limitations of the balance sheet

limitations of the balance sheet

Cost of Loan, Given information: Offered a $20 million commercial loan pri...

Given information: Offered a $20 million commercial loan priced using a 3month LIBOR index+100bp. After some preliminary research, using a money center bank''s swap trading desk

Calculate the required return of the stock, Below given th einformation of ...

Below given th einformation of the stock calculate the required return of the stock. Dividend = $4.50 every year Current sales price of stock = $ 79.85 per share Formul

A gift of residue-will-executorship law and accounts, A gift of residue ...

A gift of residue Where property is not given by a specific legacy nor by a general legacy, it makes up the residue of the testator's estate.  If the testator fails to make a g

Annual interest rate, Interest Rate on a one Payment Your parents will ...

Interest Rate on a one Payment Your parents will retire in 17 years. They presently have $270,000, and they think they will require $1 million at retirement. What annual intere

business strategy-vertical horizontal or conglomerate , What was the busin...

What was the business strategy underlying the merger? How was the acquisition financed? Was it a vertical, horizontal or conglomerate merger?   The strategy behind those merge

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