What is the answers a. through e. ?
What is the answers a. through e. ?
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Consider the following two mutually exclusive projects:
Year | Cash Flow (A) | Cash Flow (B) | ||
0 | Ć¢ĀĀ$ | 423,000 | Ć¢ĀĀ$ | 39,000 |
1 | 45,000 | 20,200 | ||
2 | 61,000 | 13,500 | ||
3 | 78,000 | 17,600 | ||
4 | 538,000 | 14,400 | ||
The required return on these investments is 14 percent.
a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Payback period | ||
Project A | years | |
Project B | years | |
b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Net present value | ||
Project A | $ | |
Project B | $ | |
c. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Internal rate of return | ||
Project A | $ | |
Project B | $ | |
d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.)
Profitability index | ||
Project A | ||
Project B | ||
e. Based on your answers in (a) through (d), which project will you finally choose?
Consider the following two mutually exclusive projects: |
Year | Cash Flow (A) | Cash Flow (B) |
0 | Ć¢ĀĀ$428,000 | Ć¢ĀĀ$41,500 |
1 | 42,500 | 20,700 |
2 | 63,500 | 13,000 |
3 | 80,500 | 20,100 |
4 | 543,000 | 16,900 |
The required return on these investments is 14 percent. |
Required: | |
(a) | What is the payback period for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) |
Payback period | |
Project A | years |
Project B | years |
(b) | What is the NPV for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) |
Net present value | |
Project A | $ |
Project B | $ |
(c) | What is the IRR for each project? (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) |
Internal rate of return | |
Project A | % |
Project B | % |
(d) | What is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 3 decimal places (e.g., 32.161).) |
Profitability index | |
Project A | |
Project B | |
(e) | Based on your answers in (a) through (d), which project will you finally choose? |