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Year 0 -20,000 Project 1 Project 2 Project 3 Project 4 Project 5 -20,000 -20,000 -20,000 -20,000 Year 1 4000 5000 2000 2000 5000 Year 2 3000 4000 3000 5000 5000 Year 3 2000 12,000 4000 9000 5000

Year 0 -20,000 Project 1 Project 2 Project 3 Project 4 Project 5 -20,000 -20,000 -20,000 -20,000 Year 1 4000 5000 2000 2000 5000 Year 2 3000 4000 3000 5000 5000 Year 3 2000 12,000 4000 9000 5000

Essentials Of Investments
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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Hi there,

I am working on this problem. Can you please show me each step in solving this question without using excel? I am trying to figure out how to calculate the payback period for each project and also how do I calculate the IRR for each project?

Riley Ltd. has the following 5 investment projects to choose from, the company needs to select one project. 

Year 0 -20,000 Project 1 Project 2 Project 3 Project 4 Project 5 -20,000 -20,000 -20,000 -20,000 Year 1 4000 5000 2000 2000 5000 Year 2 3000 4000 3000 5000 5000 Year 3 2000 12,000 4000 9000 5000
Transcribed Image Text:Year 0 -20,000 Project 1 Project 2 Project 3 Project 4 Project 5 -20,000 -20,000 -20,000 -20,000 Year 1 4000 5000 2000 2000 5000 Year 2 3000 4000 3000 5000 5000 Year 3 2000 12,000 4000 9000 5000
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