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    Bingo Corporation

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    The Bingo Corporation is in the process of determining which of the following two projects that they may invest in. The details are provided below:
    Project A B

    Cost of Capital 12% 12%

    Life of project 20 years 20 years

    Annual cash flow $350,000 $400,000

    Initial cost $1,250,000 $1,400,000

    Salvage Value $250,000 $110,000

    a. What is the payback period?

    b. What is the net present value of the two projects?

    c. What is the Internal rate of return of the two projects?

    d. What is the profitability index?

    e. Which of the two projects would you choose and which criteria would you use?

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    https://brainmass.com/business/capital-budgeting/bingo-corporation-297812

    Solution Preview

    The Bingo Corporation is in the process of determining which of the following two projects that they may invest in. The details are provided below:
    Project ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer what is the payback period.

    $2.19

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