Purchase Solution

Net Present Value and Payback- Diaz Camera Company

Not what you're looking for?

Ask Custom Question

6. Diaz Camera Company is considering two investments, both of which cost $10,000. The cash flows are as follows:
Year Project A Project B
1 . . . . . . . $6,000 $5,000
2 . . . . . . . 4,000 3,000
3 . . . . . . . 3,000 8,000
a. Which of the two projects should be chosen based on the payback method?
b. Which of the two projects should be chosen based on the net present value method? Assume a cost of capital of 10 percent.
c. Should a firm normally have more confidence in answer a or answer b?

Purchase this Solution

Solution Summary

The solution evaluates two projects based on NPV and Payback criteria

Purchase this Solution


Free BrainMass Quizzes
Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.