The Quantum Leap Company has set up a weighted scoring matrix for evaluation of potential projects. Below are five projects under consideration. 4. Two new software projects are proposed to a young, start-up cornpany. The Alpha project vvill cost $150.000 to develop and is expect. to have annual net cash flow of $40,000. The Beta project will cost $200,000 to develop and is expected to have annual net cash flow of S50,000. The company is ve, concerned about their cash flow. Using the payback period, which project is better from a cash flow standpoint? Why? a. Assume that the rate of inflation is 6% use the Net Present Value (NVM), aPProach to calculate PaYback Penriod for both project.. Which projeft would you now recommend? Why? b. in your estimation, which approach to calculating payback period is better? Explain your response. giving the pros and cons of each approach
The Quantum Leap Company has set up a weighted scoring matrix for evaluation of potential projects. Below are five projects under consideration.
4. Two new software projects are proposed to a young, start-up cornpany. The Alpha project vvill cost $150.000 to develop and is expect. to have annual net cash flow of $40,000. The Beta project will cost $200,000 to develop and is expected to have annual net cash flow of S50,000. The company is ve, concerned about their cash flow. Using the payback period, which project is better from a cash flow standpoint? Why? a. Assume that the rate of inflation is 6% use the
b. in your estimation, which approach to calculating payback period is better? Explain your response. giving the pros and cons of each approach
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