BU393 Lecture Notes - Lecture 4: Payback Period, Net Present Value
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Notes: please upload your answers on myls, this quiz is due no later than sunday, july 12, 11:59pm. Answer questions 1-4 based on the following information: Allnation corp. is considering the allocation of this year"s capital budget to project access. The firm"s strategy group has prepared estimates of the resulting cash flow from the project. The required rate of return for the project is identical to the firm"s cost of capital of 11% and the firm"s maximum payback period is 3. 5 years. 7000: (1 mark) calculate the payback period for project access. Based on payback method, would the firm accept this project: payback period = 2. 45 years. Accept the project: payback period = 2. 55 years. Accept the project: payback period = 2. 45 years. Reject the project: payback period = 2. 55 years. Reject the project: (1 mark) calculate the npv for project access. Based on the npv method, would the firm accept this project: npv = ,465. 35.
