In: Finance
Option #2: Capital Budgeting Analysis
Suppose you are the financial manager of a firm considering the following five projects.
Project A | Project B | Project C | Project D | Project E | |
Initial Investment | -$10,000 | -$15,000 | -$14,000 | -$6,000 | -$1,500 |
Year 1 | $5,000 | $5,000 | $6,000 | $4,000 | $1,000 |
Year 2 | $4,000 | $5,000 | $4,000 | $2,000 | $250 |
Year 3 | $2,000 | $5,000 | $3,500 | $2,000 | $100 |
Year 4 | $1,000 | $5,000 | $2,500 | $2,000 | $100 |
Year 5 | $5,000 | $2,000 | $100 | ||
Year 6 | $2,000 | $100 |
Calculations are given below and please refer star marks given in project A as a guide to calculations given after table.