Mgt201 GDB No. 1 Announced

Semester “Fall 2010”

“Financial Management (MGT201)”
This is to inform that Graded Discussion Board (GDB) has opened according to the following schedule
Schedule

Opening Date and Time

November 03, 2010 At 12:01 A.M. (Mid-Night)

Closing Date and Time

November 05, 2010 At 11:59 P.M. (Mid-Night)

Note: No extra or bonus/grace period is available for attempting GBD.

XYZ enterprises is planning for capital expenditure and for this purpose, it is considering two mutually exclusive projects. Each requires an initial investment of Rs.50,000. The president of XYZ Enterprises has set the maximum acceptable payback period of 4 years. After tax cash inflows associated with each project are as follows:

Cash inflows
Year
Project A
Project B

1
10,000
Rs.12,000

2
14,000
12,000

3
18,000
12,000

4
10,000
12,000

5
11,000
12,000

a) Determine the payback period of Project A and state whether it is acceptable?

b) Determine the payback period of Project B and state whether it is acceptable?