Question

after reading the article on shareholders versus stakeholders approach, think about the jiminy peak case study. how do the payback period, the npv, and the irr for this project help management make a decision?

Answer 1

The payback period, NPV, and IRR help management make a decision on the Jiminy Peak case study.

The payback period, net present value (NPV), and internal rate of return (IRR) are all financial metrics that help management make a decision on the Jiminy Peak case study.

The payback period calculates the length of time it takes for the initial investment to be recovered.

A shorter payback period indicates a quicker return on investment and may be favorable for management.

The NPV calculates the present value of the project's cash flows, taking into consideration the time value of money.

A positive NPV suggests that the project is expected to generate more cash inflows than outflows, making it a potentially profitable venture.

The IRR, on the other hand, calculates the rate of return at which the project's NPV becomes zero. A higher IRR indicates a higher return on investment and may be preferred by management.