Alba Company has an investment opportunity to invest their money around BD 50,000 with two choice of project, namely Project (A) and Project (B). Additionally, the discount rate for both project around 6%. The cash inflow for both projects as following: Year Project A Project B 1 8,000 20,000 13,000 20,000 3 18,000 20,000 4 20,000 20,000 Required: Calculate the net cash flow by using payback period method Calculate the net cash flow by using net present value method Calculate the net cash flow by using profitability index method a. b. C. d. Interpret each results of method in terms of the project expected profitability for Alba Company

Alba Company has an investment opportunity to invest their money around BD 50,000 with two choice of project, namely Project (A) and Project (B). Additionally, the discount rate for both project around 6%. The cash inflow for both projects as following: Year Project A Project B 1 8,000 20,000 13,000 20,000 3 18,000 20,000 4 20,000 20,000 Required: Calculate the net cash flow by using payback period method Calculate the net cash flow by using net present value method Calculate the net cash flow by using profitability index method a. b. C. d. Interpret each results of method in terms of the project expected profitability for Alba Company

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 22E

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