Capital budgeting decision making.
Compute the Payback, NPV, IRR, and Profitability Index for the following investments. Assume that the cost of capital for each project is 10% and the risk is similar. Which project is preferred?
Project A. Estimated cash flow is 9,962.60 per year for 9 years. Cost $50,000
Project B. Estimated cash flow is $19,677.15 per year for 6 years. Cost $75,000
Project C. Estimated cash flow is $25,075.33 per year for 5 years. Cost $90,000