need help please with nominal payback – discounted payback – net present value and IRR
You are the GM for Bicker, Slaughter, and Lynch law firm. There is an opportunity to buy out a small law firm that was just started by a young MBA/JD and you believe the firm can be grown and lucrative part of your firm.
Your finance leader has indicated that the firm has access to a credit line and could borrow the funds at a rate of 6%. He also mentions that when he runs project economics for capital budgeting, he recommends a standard 10% rate discount, but the one other time they looked at an acquisition of a smaller firm he used a 13% rate discount. You will want to select the most appropriate discount rate for this type of project.