The two projects are as follows. Discount rate = 10%.
Project X Project Y
Year Cash-Flow Cash-Flow
0 -$100,000 -$100,000
1 50,000 10,000
2 40,000 30,000
3. 30,000 40,000
4 10,000 60,000
Calculate the
- $6,032.99
- $4,239.20
- $7,881.98
- $4,917.70
Calculate
- 19%
- 49%
- 79%
- 59%
Calculate the payback period of project X
- 33 years
- 33 years
- 33 years
- 33 years
Calculate the crossover rate.
- 93%
- 58%
- 00%
- 17%
It refers to the long term investment decisions that has been taken by the top management of a company and that are irreversible in nature. These decisions require investment of large amount of the company’s cash.
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