Year Project#1 Project#2 Project#3
0 ($30.000) ($32,000) ($35,000)
1 $11,000 $15,000 $11,000
2 $11,000 $14,000 $11,000
3 $11,000 $11,000 $11,000
4 $11,000 $2,000 $11,000
5 $11,000 $500 $11,000
Scenario NPV Rate
1 5%
2 5.5%
3 6%
Using the data in the tables above, answer the following questions:
• Calculate the NPV for each project using each scenario’s NPV rate. Show your work.
• Calculate the pay-back period for each project. Show your work.
• Calculate the IRR for each project. Show your work.
• Which project would the company select using the NPV method in scenario 1? Explain your answer.
• Which project would the company select using the NPV method in scenario 2? Explain your answer.
• Which project would the company select using the NPV method in scenario 3? Explain your answer.
• Which project would the company select using the pay-back period? Explain your answer.
• Which project would the company select using the IRR method? Explain your answer.
