Lopez Company is considering three alternative investment projects below: Project 1 5.2 years Project 2 5.7 Years $ 33,700 13.1% Payback period Net present value Internal rate of return $ 26,700 a. Payback period b. Net present value c. Internal rate of return 14.2% Preferred Investment Project 3 4.9 Years Which project is preferred if management makes its decision based on (a) payback period, (b) net present value, and (c) internal rate of return? Reason $ 19,700 12.5%

Lopez Company is considering three alternative investment projects below: Project 1 5.2 years Project 2 5.7 Years $ 33,700 13.1% Payback period Net present value Internal rate of return $ 26,700 a. Payback period b. Net present value c. Internal rate of return 14.2% Preferred Investment Project 3 4.9 Years Which project is preferred if management makes its decision based on (a) payback period, (b) net present value, and (c) internal rate of return? Reason $ 19,700 12.5%

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 9PB: Joliet Company is considering two alternative investments. The company requires an 18% return from...

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