Solution-What is the payback period of project A

What is the payback period of project A

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Reference no: EM133168068

Question - CAPITAL BUDGETING - INSTRUCTIONS: Satisfy what is being asked for. Round off final answers to two (2) decimal places, omit the currency sign and include comma as separator. Example, if your answer is one million pesos, it should be presented as 1,000,000.00.

Neil Corporation has two projects under consideration. The cash flows for each project are shown in the following table. The firm has a 16% cost of capital.

	Project Alpha	Project Beta
Initial Cash Outflow	Php400,000	Php400,000
Year	Cash Inflows
1	70,000	190,000
2	100,000	160,000
3	130,000	130,000
4	160,000	100,000
5	190,000	70,000

Required -

1. What is the payback period of project A?

2. What is the payback period of project B?

3. What is the NPV of project A?

4. What is the NPV of project B?

5. Using payback period method, which project should be implemented?

6. Using NPV, which project should be implemented?

Reference no: EM133168068

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What is the payback period of project A

Reference no: EM133168068

Reference no: EM133168068

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