1a. Calculate each project’s Payback Period. 1b. Based on the payback periods, which project(s) should they accept if the project(s) are independent. 1c. Which project(s) should they accept if the projects are mutually exclusive? PLEASE DO QUESTION 1 SUB-SECTION A-C
Question 1
You currently work at Happy home Construction company The government offered the company 4 projects to undertake in building houses Management is trying to select the best investment from among these alternative independent projects. Each alternative involves an initial outlay of $160,000 and a 10% cost of capital. Management requires that all project investments should be recovered in 4 years. Their
|
Year |
Kinstown |
St Christina |
St Thomp |
St Bess |
|
1 |
60,000 |
40,000 |
41,000 |
0 |
|
2 |
50,000 |
60,000 |
41,000 |
60,000 |
|
3 |
40,000 |
0 |
41,000 |
0 |
|
4 |
30,000 |
40,000 |
41,000 |
56,000 |
|
5 |
20,000 |
20,000 |
41,000 |
50,000 |
|
6 |
8,000 |
60,000 |
0 |
80,000 |
1a. Calculate each project’s Payback Period.
1b. Based on the payback periods, which project(s) should they accept if the project(s)
are independent.
1c. Which project(s) should they accept if the projects are mutually exclusive?
PLEASE DO QUESTION 1 SUB-SECTION A-C
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