Question: We have three possible projects and we can invest in only 1 project. Suppose our weighted cost of capital is seven percent and project each project requires an investment of $10,000. Using payback, NPV and IRR determine which project we should choose and explain why.
|
Project
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
|
A
|
9000
|
2000
|
1000
|
0
|
|
B
|
4000
|
4000
|
4000
|
12000
|
|
C
|
0
|
10000
|
4000
|
11000
|