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Compute the payback period for each project

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Question - Jill Harrington, a manager at Jennings Company, is considering several potential capital investment projects. Data on these projects follow:

Project X Project Y Project Z

Initial investment $40,000 $20,000 $50,000

Annual cash inflows 25,000 10,000 25,400

PV of cash inflows 45,000 33,000 70,000

Required:

1. Compute the payback period for each project and rank order them based on this criterion.

2. Compute the NPV of each project and rank order them based on this criterion.

Reference no: EM131764835

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