The Table below shows net cash flows for 3 mutually exclusive projects from which a company can choose. Each project requires an investment in the first year, then produces a positive net cash flow for each of the following four years. Assuming an interest rate of 5%, which project would the company choose?
Does the best project have the highest total net cash flow?
The shortest payback period?

Question

The Table below shows net cash flows for 3 mutually exclusive projects from which a company can choose. Each project requires an investment in the first year, then produces a positive net cash flow for each of the following four years. Assuming an interest rate of 5%, which project would the company choose?
 Does the best project have the highest total net cash flow?
 The shortest payback period?

Quizplus · Accepted Answer

The Answer of The Table below shows net cash flows for 3 mutually exclusive projects from which a company can choose. Each project requires an investment in the first year, then produces a positive net cash flow for each of the following four years. Assuming an interest rate of 5%, which project would the company choose?
 Does the best project have the highest total net cash flow?
 The shortest payback period?

The Table Below Shows Net Cash Flows for 3 Mutually