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Compute the discounted payback period

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Q1) Gamma project has a useful life of 4 year with an initial cost of $1,000,000. The expected cash inflows for the next four years are $600,000, $500,000, $400,000, and $400,000, respectively. Compute the discounted payback period for the gamma project assuming the rate of return at 12%.

Q2. Amazon luxury Inc. is evaluating the following two mutually exclusive projects. The company estimates that the required rate of return is 10.75 percent for project A and 12 percent for project B. Which project should the company accept and why?

Reference no: EM133070955

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