Project #15124 - NPV

I need the following project completed in Microsoft Excel -- all work must be shown

 

 

1.   Two investments (A and B, below) have been proposed to the Capital Investment committee of your organization;

 

a.      The required rate of return for your company is 6%.  What is the NPV for each investment?

 

b.     What is the payback period for each investment?

 

c.      Which investment would you recommend and why?

 

 

 

 

Investment A     Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Required Rate of Return                
Costs:      $ 150,000  $  10,000  $10,000  $10,000  $10,000  $  10,000
Benefits:        $  90,000  $55,000  $35,000  $20,000  $  20,000
                 
                 
Investment B     Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Required Rate of Return                
Costs:      $   80,000          
Benefits:      $          -    $  45,000  $15,000  $10,000  $10,000  $  15,000
                 

 

 

Subject Business
Due By (Pacific Time) 10/23/2013 2:00pm
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