Solution-Calculate each project payback period

Calculate each project payback period

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Reference no: EM133176738

Question - Inno-Tech Limited is analysing four projects for its new revenue generation initiative. All projects are equally risky. The cost of capital is 12% and the initial outlay for the projects is $90,000 each. The cash flow details of the projects are presented in the table below:

Year	Mobile	Energy	Tech	Internet
Initial Outlay	(90,000)	(90,000)	(90,000)	(90,000)
1	10,000	20,000	30,000	0
2	20,000	20,000	30,000	0
3	30,000	35,000	30,000	50,000
4	40,000	35,000	30,000	40,000
5	0	30,000	30,000	50,000

Required -

i) Calculate each project's Payback period?

ii) Which project should be accepts under the Payback period?

iii) Calculate each project's Net Present Value (NPV).

iv) Based on the NPV results, if the projects are mutually exclusive, which project should be selected?

v) Based on the NPV results, if the projects are independent, which project should be selected?

Reference no: EM133176738

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Calculate each project payback period

Reference no: EM133176738

Reference no: EM133176738

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