Q2. Lamar Company is considering two projects A and B with the same initial i $10,000The following information regarding the cash inflows of the projects are rate of return is 12%. Year 1 Cash inflows (A) 3,500 3 Cash inflows (B) 3,000 3,500 3,500 4,000 2,000 3,500 1,300 1,800 2,000 A. Calculate the project payback (PB) period for each project and discuss the mo

Q2. Lamar Company is considering two projects A and B with the same initial i $10,000The following information regarding the cash inflows of the projects are rate of return is 12%. Year 1 Cash inflows (A) 3,500 3 Cash inflows (B) 3,000 3,500 3,500 4,000 2,000 3,500 1,300 1,800 2,000 A. Calculate the project payback (PB) period for each project and discuss the mo

Name: Q2. Lamar Company is considering two projects A and B with the same i
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Description: Q2. Lamar Company is considering two projects A and B with the same initial investment of$10,000The following information regarding the cash inflows of the projects are given. Requiredrate of return is 12%.YearCash inflows(A)3,5003,5004,0003.5001,30

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 3CMA

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Q2. Lamar Company is considering two projects A and B with the same initial investment of $10,000The following information regarding the cash inflows of the projects are given. Required rate of return is 12%. Year Cash inflows (A) 1 3,500 2 3,800 3.500 3 4,000 2,000 4 3.500 1,300 5 1,800 2,000 A. Calculate the project payback (PB) period for each project and discuss the most profitable project based on PB. ( B. Calculate Discounted Payback Period (DPB) discuss the most profitable project based on DPB. C. Compute the project's Profitability index (PI) discuss the most profitable project based on PI. I= Cash inflows (B) 3,000