Wau Sdn. Bhd, is evaluating two (2) mutually exclusive projects. The cash flows are as follows Year Year 3 5 Project AA (500,000) 50,000 150,000 250,000 200,000 100,000 Project BB (600,000) 200,000 200,000 200,000 200,000 200,000 How long does it take to recover the initial cost of investment for each project? Answer O Project AA = 3 years & Project BB = 3.25 years %3D O Project AA = 2.5 years & Project BB = 3 years %3D

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
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# 28
Wau Sdn. Bhd, is evaluating two (2) mutually exclusive projects. The cash flows are as follows Year
Year
2
4
5
Project AA
(500,000)
50,000
150,000
250,000
200,000
100,000
Project BB
(600,000)
200,000
200,000
200,000
200,000
200,000
How long does it take to recover the initial cost of investment for each project?
Answer
O Project AA = 3 years & Project BB
3.25 years
%3D
Project AA = 2.5 years & Project BB = 3 years
%3D
%3D
3.
Transcribed Image Text:# 28 Wau Sdn. Bhd, is evaluating two (2) mutually exclusive projects. The cash flows are as follows Year Year 2 4 5 Project AA (500,000) 50,000 150,000 250,000 200,000 100,000 Project BB (600,000) 200,000 200,000 200,000 200,000 200,000 How long does it take to recover the initial cost of investment for each project? Answer O Project AA = 3 years & Project BB 3.25 years %3D Project AA = 2.5 years & Project BB = 3 years %3D %3D 3.
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