Question

A firm is considering two projects X and Y. Following

particulars are available:

Cost

Annual Cash Inflows

Economic Life

Project X

Rs.1,00,000

Rs. 25,000

10 years

Project Y

Rs. 1,00,000

Rs. 20,000

10 year

Which project will you suggest under a. Pay back period
b. Post pay back profit and c. Post pay back profitability index​

Answer 1

Answer:

Explanation:

for option a i would consider project y as it's annual cash inflow is less compared to project x . the b option is alo project y as they will have 5,000 profit annually when they are paying back.