1-What is the essence of the discounted cash flow methods?
2-The Proposal A and B is a 2 year payback while Proposal C would be a 1 year.
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Payback for Proposal A:
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Year 1
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$80,000
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Year 2
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10,000
|
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Payback is 2 years
|
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$90,000
|
|
Payback for Proposal B:
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Year 1
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$45,000
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|
Year 2
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45,000
|
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Payback is 2 years
|
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$90,000
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Payback for Proposal C:
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Year 1
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$90,000
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What is net present value?