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Calculate the payback period for project-pound industries

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Pound Industries is attempting to select the best of three mutually exclusive projects. The initial investment and? after-tax cash inflows associated with these projects are shown in the following table.

Cash flows Project A Project B Project C

Initial investment? (CF) $80,000 $110,000 $130,000

Cash inflows? (CF), t=1 to 5 ?$25,000 ?$37,000 $38,500

a. Calculate the payback period for each project.

b. Calculate the net present value? (NPV) of each? project, assuming that the firm has a cost of capital equal to 8?%.

c. Calculate the internal rate of return? (IRR) for each project.

d. Indicate which project you would recommend.

Reference no: EM132726379

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