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This question was created from Assignment 1 Fall 2013

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This question was created from Assignment 1 Fall 2013
https://www.coursehero.com/file/8467472/Assignment-1-Fall-2013/

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Respond to the following scenarios.
Your answers should be complete (show your calculations) and supported by the concepts studied
in this session. For specific grading criteria, refer to the Individual Assignment Rubric in the
Course Content.
1.
Two new software development projects are proposed to a young, start-up company. The
Alpha project will cost $300,000 to develop and is expected to have annual net cash flow of
$40,000. The beta project will cost $200,000 develop and is expected to have annual net
cash flow of $40,000. The company is very concerned about their cash flow. Using the
payback period method, which project is better from a cash flow standpoint? Why?
2.
A five-year project has a projected net cash flow of $25,000, $35,000, $40,000, $25,000,
and $20,000 in the next five years. It will cost $60,000 to implement the project. If the
required rate of return is 15%, conduct a discounted cash flow calculation to determine the
NPV.

 
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