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NPV vs. Payback Method vs. Profitability Index Alfred Stein is about to invest $1,000. Alfred is a very cautious man and would like to have some...

NPV vs. Payback Method vs. Profitability Index

Alfred Stein is about to invest $1,000. Alfred is a very cautious man and would like to have some expert advice on which two projects is best for him. He has not told you his exact cost of capital because he likes to keep such information private, but he has told you to consider 8 percent, 10 percent, and 12 percent in your calculations. He has also told you that the salesperson from whom he expects to purchase his equipment has given him the following expected cost savings patterns: 

Year Project 1

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