The manager of Sensible Essentials conducted an excellent seminar explaining project evaluation techniques such as Payback method, NPV and IRR. Nevertheless, the guidelines failed to fully demonstrate the essence of project appraisal techniques.
You are the Genesis accountant and have taken a class recently in financing. You agree to prepare a PowerPoint presentation of approximately 6–8 minutes using the examples and information below:
Capital investment Project A $100,000 Project B $100,000
Both project has the useful life of 6 years and are expected to generate the following cash flows
Year 1 $ 80,000 $ 40,000
Year 2 $ 64,000 $ 50,000
Year 3 $ 51,200 $ 60,000
Year 4 $ 40,960 $ 60,000
Year 5 $ 32,768 $ 60,000
Year 6 $ 26,214 $ 50,000