Capital Investment Analysis (in £):ProjectsInitial OutlayYear 1Year 2Year 3Year 4C-£25,000£7,000£8,000£9,000£10,000D-£30,000£6,000£7,000£8,000£9,000Required:Calculate the payback period for each...
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Accounting
Capital Investment Analysis (in £):
Projects
Initial Outlay
Year 1
Year 2
Year 3
Year 4
C
-£25,000
£7,000
£8,000
£9,000
£10,000
D
-£30,000
£6,000
£7,000
£8,000
£9,000
Required:
Calculate the payback period for each project.
Identify the preferred project if the standard payback period is 2.5 years.
Compute the NPV at a discount rate of 11%.
Determine the IRR for each project.
Calculate the profitability index (PI) for both projects.
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