PharmPic is considering the following project with the following cash flows: PharmPic Project Period Cash Flow 0 -$50,000 1 -$7,000 2 -$40,000 3 $10,000 4 $5,000 5 $20,000 6 $25,000 7 $32,000 8 $37,000 DosageDoc is considering the following project with the following cash flows: DosageDoc Project Period Cash Flow 0 -$50,000 1 70,000 2 -40,000 3 30,000 4 -7,000 PharmPic Project’s cash flows are semi-annually. PharmPic has the following two financing choices; loan with an APR of 6.5% compounding semi-annually or a loan with an APR of 6.35% compounding quarterly. DosageDoc Project’s cash flows are annually. DosageDoc has the following two financing choices; loan with an 8.45% rate over four years or a loan based with an APR of 2.5% compounding daily. Which firm’s project satisfies the most decision rules when the current payback period requirement is a half a year and the discounted payback period requirement is 1 years. Do a complete analysis of these projects. Include all the decision rules and considerations
PharmPic is considering the following project with the following cash flows:
PharmPic Project
Period Cash Flow
0 -$50,000
1 -$7,000
2 -$40,000
3 $10,000
4 $5,000
5 $20,000
6 $25,000
7 $32,000
8 $37,000
DosageDoc is considering the following project with the following cash flows:
DosageDoc Project
Period Cash Flow
0 -$50,000
1 70,000
2 -40,000
3 30,000
4 -7,000
PharmPic Project’s cash flows are semi-annually. PharmPic has the following two financing choices; loan with an APR of 6.5% compounding semi-annually or a loan with an APR of 6.35% compounding quarterly.
DosageDoc Project’s cash flows are annually. DosageDoc has the following two financing choices; loan with an 8.45% rate over four years or a loan based with an APR of 2.5% compounding daily.
Which firm’s project satisfies the most decision rules when the current payback period requirement is a half a year and the discounted payback period requirement is 1 years. Do a complete analysis of these projects. Include all the decision rules and considerations.
Cash flows for Pharmpic project:
Cash flows for DosageDoc project
To Find:
- Payback period
- Discounted payback period
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 6 images
