Ela incorporated uses discounted payback period for projects under PhP 25.000 and has a cut off period of 4 years for these small value projects. Two projects. R and S are under consideration. The anticipated cash flows for these two projects are listed below. If Ela incorporated uses an 8% discount rate on these projects are they accepted or rejected?
Ela incorporated uses discounted payback period for projects under PhP 25.000 and has a cut off period of 4 years for these small value projects. Two projects. R and S are under consideration. The anticipated cash flows for these two projects are listed below. If Ela incorporated uses an 8% discount rate on these projects are they accepted or rejected?
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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Ela incorporated uses discounted payback period for projects under PhP 25.000 and has a cut off period of 4 years for these small value projects. Two projects. R and S are under consideration. The anticipated cash flows for these two projects are listed below. If Ela incorporated uses an 8% discount rate on these projects are they accepted or rejected?
Transcribed Image Text:Eia Incorporated uses discounted payback period for projects under PhP 25,000 and has a cut off period of 4 years for these small
value projects. Two projects, R and S are under consideration. The anticipated cash flows for these two projects are listed below. If
Eia Incorporated uses an 8% discount rate on these projects are they accepted or rejected?
Cash Flows Project R
Project S
Initial Cost PhP 24,000 PhP 18,000
Year 1
PhP 6,000 PhP 9,000
Year 2
PhP 8,000 PhP 6,000
Year 3
PhP 10,000 PhP 6,000
Year 4
PhP 12,000 PhP 3,000
(A Accept Project R; Reject Project S
(B Accept Project S; Reject Project R
© Accept both Projects
D Reject both Projects
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