Solution-Why you are not choosing the other two methods

Why you are not choosing the other two methods

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Reference no: EM132528530

Projects X and Y have the following expected net cash flows:

Project X Project Y

Year Cash Flow Cash Flow

0 -$500,000 -$500,000
1 250,000 350,000
2 250,000 350,000
3 250,000 300,000
4 200,000 200,000
5 150,000

Both the projects are of the same company, Deccan Pharma. The most recently paid dividend was $2 and it is growing at 5% for the infinite period of time. Moreover, the stock is selling for $45.

Assume you are a finance manager of the company. Which project you should Choose based on NPV? Would your decision change if payback method was used? Or Discounted Payback period?

Which method you think is the best to find out the solution and why? Why you are not choosing the other two methods?

Can you help me to slove this problem.

Reference no: EM132528530

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Why you are not choosing the other two methods

Reference no: EM132528530

Reference no: EM132528530

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