Don't Answer the Payback Period since its already been answered
Extracted text: YOUR UNDARSIANDING Directions: Evaluate the following projects. Which is the best among them using the different tools in capital budgeting? Use the following tools to make your Project Cash outlay A В P920,000 decisions: P1,000,000 310,000 P880,000 1. Payback period 2. Net present value 3. Accounting rate of return 4. Profitability index Net Cash inflow Year 1 200,000 290,000 Year 2 310,000 220,000 280,000 Year 3 310,000 250,000 300,000 Year 4 310,000 180,000 250,000 Year 5 310,000 90,000 295,000 Year 6 310,000 90,000 195,000 Salvage value 70,000 80,000 Discount rate 10% 8% 12% Economic life 4 years 5 years 6 years