Reference no: EM132933929
Pedro's plumbing has evaluated three projects:
Project A: Buy a new fleet of delivery vehicles investment $750,000; net present value, $200,000; payback 5 years
Project B: Re-equip the warehouse for greater efficiency investment, $1,000,000; net present value, $250,000 payback 4 years
Project C: Launch a new line of products investment, $1,500,000; net present value, $300,000; payback 6 years
All three projects are acceptable as they have positive net present values, but the company is short of cash and cannot invest in all of them.
Required -
Problem 1: If the company can only invest in one of the projects, which one would you recommend?