If the opportunity cost of capital of 4%, Following information relate to the cash flow of below three projects proposals.   Project Year: 0 1 2 3 X -$40,000 +20,000 +18,000 +25,000 Y   -$65,000 +15,000 +30,000 +35,000 Z   -70000 25,000 25,000 30,000   which project will be acceptable under the Net Present Value method. Explain . Which project will be acceptable under the discount payback period?

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter15: Capital Investment Analysis
Section: Chapter Questions
Problem 15.3.1P
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  1. If the opportunity cost of capital of 4%, Following information relate to the cash flow of below three projects proposals.

 

Project

Year: 0

1

2

3

X

-$40,000

+20,000

+18,000

+25,000

Y

 

-$65,000

+15,000

+30,000

+35,000

Z

 

-70000

25,000

25,000

30,000

 

  1. which project will be acceptable under the Net Present Value method. Explain .
  2. Which project will be acceptable under the discount payback period?
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