Accounting payback, Financial payback, NPV, & IRR

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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?

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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

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