You have a project in mind that will be able to meet the strategic objective of your organization- While evaluating the project, you found out that the
project would cost $600,000- Since you are introducing a new potential product in the market, you are very hopeful that your expected inflows will be
$30,000 per quarter for the first two years and then $90,000 per quarter thereafter. What is the payback period of this project?
36 MONTHS
38 MONTHS
48 MONTHS
52 MONTHS
2-Your company can accept one of three possible projects- Project A has a NPV OF $30,000, it Will take 5 years to complete and the associated cost
will be $10,000-Project B has NPV of $60,000,it will take 3 years to complete and the cost will be $15,000-Project C has NPV of $80,000 and it will
take 4 years complete and it will cost $40,000-Based on the information, which project would you pick?
They all have the same value
PROJECT A
PROJECT B
PROJECT C
3- Compare and contrast NPV and Payback period?Why NPV is better than payback?