Cash Flow Projects (in £):ProjectsInitial InvestmentYear 1Year 2Year 3Year 4Year 5A-£50,000£15,000£20,000£10,000£5,000£8,000B-£60,000£10,000£15,000£20,000£25,000£5,000Required:Compute the payback period for...
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Accounting
Cash Flow Projects (in £):
Projects
Initial Investment
Year 1
Year 2
Year 3
Year 4
Year 5
A
-£50,000
£15,000
£20,000
£10,000
£5,000
£8,000
B
-£60,000
£10,000
£15,000
£20,000
£25,000
£5,000
Required:
Compute the payback period for each project.
If the standard payback period is 4 years, which project is preferable?
Calculate the NPV of each project assuming a discount rate of 10%.
Determine the internal rate of return (IRR) for each project.
Assess the profitability index (PI) for both projects.
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