Consider the following two mutually exclusive projects (W and Z). -The table- Whichever project you choose, if any, you require a 12 percent return on your investment. (a) Calculate the payback period for each project. (b) Calculate the net present value (NPV) of each project (c) Based on your answers in (a) and (b), which project will you finally choose? Explain.

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
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Consider the following two mutually exclusive projects (W and Z).

-The table-

Whichever project you choose, if any, you require a 12 percent return on your investment.
(a) Calculate the payback period for each project.
(b) Calculate the net present value (NPV) of each project
(c) Based on your answers in (a) and (b), which project will you finally choose? Explain. 

Year Cash Flow (W) Cash Flow (Z)
0
- $23,500
- $ 38,000
1
15,000
17,500
2
7,500
13,000
3
6,500
20,400
Transcribed Image Text:Year Cash Flow (W) Cash Flow (Z) 0 - $23,500 - $ 38,000 1 15,000 17,500 2 7,500 13,000 3 6,500 20,400
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Hello may i ask for the NPV, where the PV Factor come? Are there have formula?

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