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Accounting payback, Financial payback, NPV, & IRR

Given on Project A and Project B, both 4 yr. projects:

Project A Project B
Investment $750,000 $900,000

4 yrs. C/F (1) $200,000 (1) $300,000
(2) $250,000 (2) $325,000
(3) $275,000 (3) $200,000
(4) $300,000 (4) $250,000

k = 10% 9%

Calculate for both projects Accounting payback, Financial payback, NPV, & IRR. For each project, should you go ahead with investment and why or why not? And if project were mutually exclusive, which one, if either should you invest in and why?

Solution Preview

Given on Project A and Project B, both 4 yr. projects:

Project A Project B
Investment $750,000 $900,000

4 ...

Solution Summary

This explains the steps to compute the Accounting payback, Financial payback, NPV, & IRR

$2.19

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