Problem:
Yu-Ham has three investments proposal (not mutually exclusive). His company uses 13% annual rate to discount cash flow for NPV. Calculate payback period for each investment; Calculate IRR for each investment and calculate NPV for each investment.
Which investment should Yu-Ham take, why? (negative values in time zero). Below expected cash flow for each investment)
| Year |
|
A |
B |
C |
| 0 |
|
-500 |
-2000 |
-500 |
| 1 |
|
200 |
400 |
300 |
| 2 |
|
300 |
500 |
200 |
| 3 |
|
400 |
800 |
100 |
| 4 |
|
500 |
900 |
|
| 4 |
|
|
1000 |
|