They provide management with information about the company’s past performance.
as preventive maintenance
Internal rate of return
|Project A||Project B|
|Annual Net Income||$50,000||45,000|
|Annual Cash Inflow||$220,000||$200,000|
|Estimated Useful Life||5 years||4 years|
The company requires a 10% rate of return on all new investments.
Part (a): Calculate the payback period for each project.
Part (b): Calculate the net present value for each project.
Part (c): Which project should Jackson Company accept and why? (Points : 30)