Calculate payback for all three projects

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Reference no: EM132630390

Assume r= 12%

Q1 Mr Ali has an option of investing in one project from the proposed three different projects. The initial investment and cash flows are given below

years Cf - project 1 Cf - project 2 Cf - project 3

0 (10,000) (28,000) (22,000)

1 1000 3000 4000

2 880 7000 1000

3 6000 8000 1000

4 4000 12000 9000

5 2000 7500 11500

6 3650 6400 8900

a. Calculate payback for all three projects

b. Calculate discounted payback for all three projects

c. Calculate NPV for all three projects

d. Calculate profitability index for all three projects

e. Calculate IRR for all three projects

f. Write detailed comment on which project Mr Ali must invest on the basis of above calculated criteria's and why he must ignore the other projects.

Reference no: EM132630390

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