Calculate payback for all three projects

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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 1,000 3,000 4,000
2 880 7,000 1,000
3 6,000 8,000 10,000
4 4,000 12,000 9,000
5 2,000 7,500 11,500
6 3,650 6,400 8,900

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. 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: EM132634778

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