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
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 7PA: There are two projects under consideration by the Rainbow factory. Each of the projects will require...
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