As part of the analyst team of Metflix, you are considering the following 2 mutually exclusive...

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As part of the analyst team of Metflix, you are considering the following 2 mutually exclusive projects (cash flows in $). Assume a discount rate of 14.0% throughout the problem. Metflix wants a payback period of 2 years or less and define the profitability index as PI = PV(Future Cash Flows)/Cost. Year 0 1 2 3 4 Project X -1006 240 290 440 1130 a). What's the payback period for each of the 2 projects? [2 Marks] (Round to two decimal places.) The payback period of project X is The payback period of project Y is years. The profitability index of project Y is Project Y -750 400 370 250 390 years. b). What's the profitability index for each of the 2 projects? [2 Marks] (Round to three decimal places.) The profitability index of project X is c) Which project should the company choose? [1 Mark] According to the payback rule, the company should choose O (No answer given) Project B O Project A According to the profitability index, the company should choose O (No answer given) Project B O Project A As part of the analyst team of Metflix, you are considering the following 2 mutually exclusive projects (cash flows in $). Assume a discount rate of 14.0% throughout the problem. Metflix wants a payback period of 2 years or less and define the profitability index as PI = PV(Future Cash Flows)/Cost. Year 0 1 2 3 4 Project X -1006 240 290 440 1130 a). What's the payback period for each of the 2 projects? [2 Marks] (Round to two decimal places.) The payback period of project X is The payback period of project Y is years. The profitability index of project Y is Project Y -750 400 370 250 390 years. b). What's the profitability index for each of the 2 projects? [2 Marks] (Round to three decimal places.) The profitability index of project X is c) Which project should the company choose? [1 Mark] According to the payback rule, the company should choose O (No answer given) Project B O Project A According to the profitability index, the company should choose O (No answer given) Project B O Project A

Answer rating: 100% (QA)

a Payback Period Payback Period Years before full recovery Unrecovered cost at the start of the year ... View the full answer