Badr & Sons. is evaluating 2 (TWO) mutually exclusive investment projects. INITIAL CAPITAL OUTLAY for both projects are as stated in Year 0. The company’s REQUIRED RATE OF RETURN IS 10.50% and sets 2.5 YEARS AS ITS MINIMUM (DESIRED) PAYBACK PERIOD. Information about cash flows from the project for the next four years is tabulated below: YEAR PROJECT ALPHA PROJECT BETA 0 SR -185,000 SR -145,000 1 45,000 41,000 2 75,000 45,000 3 55,000 55,000 4 66,000 70,000 What is PAYBACK PERIOD for PROJECT ALPHA ONLY.?
Badr & Sons. is evaluating 2 (TWO) mutually exclusive investment projects. INITIAL CAPITAL OUTLAY for both projects are as stated in Year 0. The company’s REQUIRED RATE OF RETURN IS 10.50% and sets 2.5 YEARS AS ITS MINIMUM (DESIRED) PAYBACK PERIOD. Information about cash flows from the project for the next four years is tabulated below: YEAR PROJECT ALPHA PROJECT BETA 0 SR -185,000 SR -145,000 1 45,000 41,000 2 75,000 45,000 3 55,000 55,000 4 66,000 70,000 What is PAYBACK PERIOD for PROJECT ALPHA ONLY.?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Badr & Sons. is evaluating 2 (TWO) mutually exclusive investment projects. INITIAL CAPITAL OUTLAY for both projects are as stated in Year 0. The company’s REQUIRED
Information about cash flows from the project for the next four years is tabulated below:
|
YEAR |
PROJECT ALPHA |
PROJECT BETA |
|
0 |
SR -185,000 |
SR -145,000 |
|
1 |
45,000 |
41,000 |
|
2 |
75,000 |
45,000 |
|
3 |
55,000 |
55,000 |
|
4 |
66,000 |
70,000 |
What is PAYBACK PERIOD for PROJECT ALPHA ONLY.?
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