Your company is trying to decide between the following three projects. In your calculations, assume a...

Your company is trying to decide between the following three projects. In your calculations, assume a 6% interest rate. Project A Project B Project C Project A has $400 in upfront costs in year 0 and gets 250 in benefits in year 0. It accrues $300 in benefits each year in years 1-3, and has annual costs of $200 in years 1-3. Project B costs $1300 in year 0 and has no benefits in year 0. It accrues $650 in benefits each year in years 1-3. Annual costs in years 1-3 are $450. Project C has $1000 in upfront benefits and 1600 in costs in year 0. It accrues 600 in benefits in years 1-3 and 350 in costs in years 1-3. Time value of money. Using the discounting techniques we learned in class (assume an interest rate of 6%), appropriately discount the costs and benefits of the three projects. Which project will have a higher return on investment? Be sure to show your work (10 pts). Which project achieves payback faster? (5 pts)?

Expert Solution

ekkarill92 answered 12 hours ago

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