Computation payback period, NPV, IRR.
We have three possible projects and we can invest in only one project. Suppose our weighted cost of capital is 7% and project each project requires an investment of $10,000. Using payback, NPV and IRR decide which project we should select and explain why
Project
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
A
|
9000
|
2000
|
1000
|
0
|
B
|
4000
|
4000
|
4000
|
12000
|
C
|
0
|
10000
|
4000
|
11000
|