Calculate the payback period for project

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Reference no: EM132389535

Suppose you are the financial manager of a firm considering the following five projects.

Project A Project B Project C Project D Project E

Initial Investment-$10,000 -$15,000 -$14,000 -$6,000 -$1,500

Year 1 $5,000 $5,000 $6,000 $4,000 $1,000

Year 2 $4,000 $5,000 $4,000 $2,000 $250

Year 3 $2,000 $5,000 $3,500 $2,000 $100

Year 4 $1,000 $5,000 $2,500 $2,000 $100

Year 5  $5,000 $2,000  $100

Year 6    $2,000  $100

**Please show formulas and calculations for each.***

  1. Calculate the Payback Period for each project.
  2. Calculate the NPV for each project, assuming a discount rate of 11%.
  3. Calculate the IRR for each project.
  4. Which projects should the firm implement based on your analysis If the projects are mutually exclusive? What if they are independent? Craft an email to your CFO explaining your rationale proving the choices based on the considerations of shareholder value. Assume there is no capital constraint and any desired projects can be funded.

Reference no: EM132389535

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