Answer:
-7.407%
Explanation:
Let interest rate be x%
Present value of payment = $130,002 * PV of discounting factor (rate%, time period)
$103,200 = $130,002 * 1.0x^3
1.0x^3 = $103,200 / $130,002
1.0x = ($103,200 / $130,002)^(1/3)
1.0x = 0.793834^(1/3)
1.0x = 0.92592660981
x = (0.92592660981 - 1) * 100
x = -0.07407*100
x = -7.407%
Answer:
0.88 years
1 year
Explanation:
Payback period calculates the amount of the time it takes to recover the amount invested in a project from its cumulative cash flows.
For project A:
Amount invested = $-22,000
Amount recovered in year 1 = $-22,000 + $25,000 =$-3000
The amount invested is recovered In 22,000 / $25,000 = 0.88 years
For project B:
Amount invested = $-22,000
Amount recovered in year 1 = $-22,000 + $22,000 = 0
The amount invested is recovered in a year
I hope my answer helps you
Answer:
Please find solution attached below
Explanation:
