Homework Answers
rate positively ..
| Ans | ||||||||
| Cash flow | Discounted payback | cumulative cash flow | ||||||
| year | A | B | PVIF @ 8% | A | B | A | B | |
| 0 | -715740 | -1201700 | 1 | (715,740) | (1,201,700) | (715,740) | (1,201,700) | |
| 1 | 86212 | 586212 | 0.925926 | 79,826 | 542,789 | (635,914) | (658,911) | |
| 2 | 313526 | 413277 | 0.857339 | 268,798 | 354,318 | (367,116) | (304,593) | |
| 3 | 427594 | 231199 | 0.793832 | 339,438 | 183,533 | (27,678) | (121,059) | |
| 4 | 285552 | 0.73503 | 209,889 | - | 182,211 | (121,059) | ||
| Discounted payback period of A | =3+27678/209889 | 3.13 | ||||||
| Discounted payback period of B | 0.00 | |||||||
| ans b) | timelines should choose project A. | |||||||
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