ARCABE Enterprises is trying to select the best investment from among four alternatives. Each alternative involves an initial outlay of P100,000. Their cash flows follow(see image) Evaluate and rank each alternative based on: a) discounted payback period (use a 10% for cost of capital) b) net present value (use a 10% discount rate) c) internal rate of return.
ARCABE Enterprises is trying to select the best investment from among four alternatives. Each alternative involves an initial outlay of P100,000. Their cash flows follow(see image) Evaluate and rank each alternative based on: a) discounted payback period (use a 10% for cost of capital) b) net present value (use a 10% discount rate) c) internal rate of return.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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ARCABE Enterprises is trying to select the best investment from among four alternatives. Each alternative involves an initial outlay of P100,000. Their cash flows follow(see image)
Evaluate and rank each alternative based on:
a) discounted payback period (use a 10% for cost of capital)
b)
c)
Transcribed Image Text:Year A
B
1 $10,000 $50,000 $25,000 $ 0
20,000
40,000
25,000
3
30,000
30,000
25,000 45,000
4
40,000
25,000 55,000
50,000
O 25,000 60,000
2.
5
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