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Project Financial Assessment (in $):Project A:Initial Cost: $50,000Year 1: $10,000Year 2: $15,000Year 3: $20,000Year 4:...

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Accounting

Project Financial Assessment (in $):
  • Project A:
    • Initial Cost: $50,000
    • Year 1: $10,000
    • Year 2: $15,000
    • Year 3: $20,000
    • Year 4: $25,000
  • Project B:
    • Initial Cost: $45,000
    • Year 1: $5,000
    • Year 2: $10,000
    • Year 3: $20,000
    • Year 4: $30,000

Required:

  1. Calculate the payback period for each project.
  2. If the standard payback period is 3 years, which project will you select?
  3. Compute the discounted payback period at a cost of capital of 8%.
  4. Determine the NPV of each project using a discount rate of 8%.
  5. Calculate the IRR for each project.

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