What is the payback period for each project which project


You are asked to evaluate two projects.Project A requires an initial investment of €10000 and pays back in years 1 to 4 the following amounts €1000, €2500, €4750, €6500. The equipment requires an upgrade in year 2 costing €1500. Project B requires an initial investment of €9000 and pays back in years 1 to 4 €6000, €3000, €1000, €1000. A maintenance charge in year 3 will cost €500.

Using a discount rate of 5% calculate the NPV for each project.

What is the IRR for each project?

What is the Payback period for each project?

Which project would you recommend? Give your reasons.

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Financial Management: What is the payback period for each project which project
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