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1) Payback Period Technique. 2) Discounted Payback Period Technique. 3) Net Present Value Technique

1) Payback Period Technique. 2) Discounted Payback Period Technique. 3) Net Present Value Technique

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Salalah company management is considering two competing investment Projects A and B.
Year
Initial Investment

1
2
3
4
5
Project A 8000 2750 2750 2750 2750 2750
Project B 8000 3000 3000 3000 3000 3000
DISCOUNT RATE 5.05%
Q1) Use the information below and help the management in choosing the most desirable Project using all the following techniques:


1) Payback Period Technique.
2) Discounted Payback Period Technique.
3) Net Present Value Technique
4) Profitability Index Technique.
Q2) Based on your solution or answer to question 1, comment as to which proposal is better and why?

Salalah company management is considering two competing investment Projects A and B. Project A Project B 8000 Year Initial Investment 8000 1 2750 3000 2 2750 3000 3 2750 3000 4 2750 3000 5 2750 3000 DISCOUNT RATE 5.05% Q1) Use the information below and help the management in choosing the most desirable Project using all the following techniques: استخدم المعلومات الواردة أدناه وساعد الإدارة في اختيار المشروع الأكثر رواجًا باستخدام جميع الأساليب التالية 1) Payback Period Technique. 2) Discounted Payback Period Technique. 3) Net Present Value Technique 4) Profitability Index Technique. Q2) Based on your solution or answer to question 1, comment as to which proposal is better and why?
Transcribed Image Text:Salalah company management is considering two competing investment Projects A and B. Project A Project B 8000 Year Initial Investment 8000 1 2750 3000 2 2750 3000 3 2750 3000 4 2750 3000 5 2750 3000 DISCOUNT RATE 5.05% Q1) Use the information below and help the management in choosing the most desirable Project using all the following techniques: استخدم المعلومات الواردة أدناه وساعد الإدارة في اختيار المشروع الأكثر رواجًا باستخدام جميع الأساليب التالية 1) Payback Period Technique. 2) Discounted Payback Period Technique. 3) Net Present Value Technique 4) Profitability Index Technique. Q2) Based on your solution or answer to question 1, comment as to which proposal is better and why?
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