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XXX Sdn Bhd is in the process of choosing the better of two equal-risk, mutually exclusive capital expenditure projects—M and N. The relevant cash flows for each project are shown in the following table. The maximum allowable payback period for the project is 4 years. Project A (RM) Project B (RM) Initial Investment (RM) 28,500 27,000 Year Cash Flow (RM) 1 11,500 11,000 2 11,500 10,000 3 11,500 9,000 4 11,500 8,000 a. Calculate the modified payback period for each project.

XXX Sdn Bhd is in the process of choosing the better of two equal-risk, mutually exclusive capital expenditure projects—M and N. The relevant cash flows for each project are shown in the following table. The maximum allowable payback period for the project is 4 years. Project A (RM) Project B (RM) Initial Investment (RM) 28,500 27,000 Year Cash Flow (RM) 1 11,500 11,000 2 11,500 10,000 3 11,500 9,000 4 11,500 8,000 a. Calculate the modified payback period for each project.

Essentials Of Investments
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
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XXX Sdn Bhd is in the process of choosing the better of two equal-risk, mutually exclusive capital expenditure projects—M and N. The relevant cash flows for each project are shown in the following table. The maximum allowable payback period for the project is 4 years. Project A (RM) Project B (RM) Initial Investment (RM) 28,500 27,000 Year Cash Flow (RM) 1 11,500 11,000 2 11,500 10,000 3 11,500 9,000 4 11,500 8,000 a. Calculate the modified payback period for each project.
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