The cost of a project is Tk. 50,000 and it generates cash inflows of Tk. 20,000, Tk. 15,000, Tk. 25,000, and Tk. 10,000 over four years. Using the present value index method, appraise the profitability of the proposed investment, assuming a 10% rate of discount.
Consider the following two mutually exclusive projects, each of which require an initial investment of Tk. 100,000 and have no salvage value. This organization, which has a cost of capital of 15%, must choose one or the other.
Compute the payback period of these two projects. Using the payback. criterion, which project is more desirable?