YOUR UNDERSFANDING Directions: Evaluate the following projects. Which is the best among them using the different tools in capital budgeting? Use the following tools to make your Project Cash outlay А decisions: P880,000 200,000 P1,000,000 P920,000 1. Payback period 2. Net present value 3. Accounting rate of return 4. Profitability index Net Cash inflow Year 1 310,000 290,000 280,000 300,000 Year 2 310,000 220,000 Year 3 310,000 250,000 Year 4 310,000 180,000 250,000 295,000 Year 5 310,000 90,000 Year 6 310,000 90,000 195,000 Salvage value 70,000 80,000 Discount rate 10% 8% 12% Economic life 4 years 5 years 6 years
YOUR UNDERSFANDING Directions: Evaluate the following projects. Which is the best among them using the different tools in capital budgeting? Use the following tools to make your Project Cash outlay А decisions: P880,000 200,000 P1,000,000 P920,000 1. Payback period 2. Net present value 3. Accounting rate of return 4. Profitability index Net Cash inflow Year 1 310,000 290,000 280,000 300,000 Year 2 310,000 220,000 Year 3 310,000 250,000 Year 4 310,000 180,000 250,000 295,000 Year 5 310,000 90,000 Year 6 310,000 90,000 195,000 Salvage value 70,000 80,000 Discount rate 10% 8% 12% Economic life 4 years 5 years 6 years
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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100%
PLEASE USE NPV(
Transcribed Image Text:YOUR
UNDARSIANDING
Directions: Evaluate the following projects. Which is the best among them using the different
tools in capital budgeting?
Use the following tools to make your
Project
Cash outlay
A
В
P920,000
decisions:
P1,000,000
310,000
P880,000
1. Payback period
2. Net present value
3. Accounting rate of return
4. Profitability index
Net Cash inflow Year 1
200,000
290,000
Year 2
310,000
220,000
280,000
Year 3
310,000
250,000
300,000
Year 4
310,000
180,000
250,000
Year 5
310,000
90,000
295,000
Year 6
310,000
90,000
195,000
Salvage value
70,000
80,000
Discount rate
10%
8%
12%
Economic life
4 years
5 years
6 years
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