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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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 ...
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