1. Calculate the NPV and Profitability Index for each of the following projects, assuming the cost...

 

Transcribed Image Text:

1. Calculate the NPV and Profitability Index for each of the following projects, assuming the cost of capital is 7%. YEAR iPad Pro iPhone 9 I 0 -36,000 -11,500 1 18,000 0 2 12,600 7,500 3 4,500 4,000 4 16,200 6,000 5 3,000 2,000 Which project would you choose if only one could be chosen? If multiple projects could be undertaken, how many would you accept? 2. You are given the opportunity to invest in one of two projects. Project X requires an initial outlay of 30,000, and will receive 37,000 after 3 years. Project Y requires an initial outlay of 100,000 and will receive 117,000 after 4 years. Using the Internal Rate of Return approach, which project would be preferred? 1. Calculate the NPV and Profitability Index for each of the following projects, assuming the cost of capital is 7%. YEAR iPad Pro iPhone 9 I 0 -36,000 -11,500 1 18,000 0 2 12,600 7,500 3 4,500 4,000 4 16,200 6,000 5 3,000 2,000 Which project would you choose if only one could be chosen? If multiple projects could be undertaken, how many would you accept? 2. You are given the opportunity to invest in one of two projects. Project X requires an initial outlay of 30,000, and will receive 37,000 after 3 years. Project Y requires an initial outlay of 100,000 and will receive 117,000 after 4 years. Using the Internal Rate of Return approach, which project would be preferred?

Answer rating: 100% (QA)

Project Analysis Heres the analysis for each project considering NPV and Profitability Index PI at a ... View the full answer