SOLUTION: Below are the estimated cash flows for two projects: S and L. The WACC is 10%.
Time 0 | 1 | 2 | 3 |
Project L -100| 10 | 60 | 80 |
Project S -100| 70 |
Algebra.Com
Question 1157712: Below are the estimated cash flows for two projects: S and L. The WACC is 10%.
Time 0 | 1 | 2 | 3 |
Project L -100| 10 | 60 | 80 |
Project S -100| 70 | 50 | 20 |
1) What is the payback period? Find the paybacks for Projects L and S.
2) What is the rationale for the payback method? According to the payback criterion, which project(s) should be accepted if the firm’s maximum acceptable payback is 2 years, if Projects L and S are independent? If Projects L and S are mutually exclusive?
3) What is the difference between the regular and discounted payback methods? What is Project L’s discounted payback, assuming a 10% cost of capital?
Answer by ikleyn(52790) (Show Source): You can put this solution on YOUR website!
.
Hey,
consulting in accounting is not our specialization.
This problem is far from the profile of this forum.
Have a nice day (!)
RELATED QUESTIONS
Rate of return analysis:
Consider two projects with the following cash flows:
(answered by Theo)
Marie who is a business woman seeks to invest her money in any of two projects X and Y... (answered by Theo)
3. Pharmos Incorporated is a Pharmaceutical Company which is considering investing in a... (answered by ikleyn)
Any help with this problem would be greatly appreciated.
(Risk-adjusted discount rates (answered by help314)
A company is considering investing on a particular project. The alternative projects... (answered by Theo)
There are two competing proposals for the redevelopment of a piece of vacant land in... (answered by Theo)
How do I solve for X in excel?
Consider the following project’s cash flows:
(answered by Theo)
Hi, I'm getting stuck, so please I need a volunteer to help me
here is the problem... (answered by KMST,Boreal)
In the chemistry laboratory. Jim is working with six large jars of capacities 5 L,4 L,3... (answered by richwmiller)