Determine the Payback, Discounted Payback, Net Present Value, Internal rate of return, Modified internal rate of return, Crossover rate, do the projects on their own, would you accept project, for projects A&B

In simple terms, the payback period is calculated by dividing the cost of the investment by the annual cash flow until the cumulative cash flow is positive, which is the payback year. Payback period is generally expressed in years.

Answers are based off of the cash flow of projects A&B. The cash flow starts in the negative and increases over the years. Each column is separate and calculations are done for each. the answers in blue are the numbers I came up with, when solving

Determine if the answers are correct.

Transcribed Image Text:

Year 0 WNIO 1 2 3 Payback Discounted Payback Net Present Value Internal Rate of Return Modified Internal Rate of Return Crossover Rate Mutually Exclusive Projects* Independent Projects *based on NPV with a check mark Project A -100000 5000 55000 135000 3.7 2.3 yrs 47,854.57 28.908 24.933 yes I=11% or Project B -120000 118000 69000 3.97 1.03 yrs 42,308.25 39.540 24.833 no Year 0 WNIO 1 2 3 Payback Discounted Payback Net Present Value Internal Rate of Return Modified Internal Rate of Return Crossover Rate Mutually Exclusive Projects* Independent Projects *based on NPV with a check mark Project A -100000 5000 55000 135000 3.7 2.3 yrs 47,854.57 28.908 24.933 yes I=11% or Project B -120000 118000 69000 3.97 1.03 yrs 42,308.25 39.540 24.833 no

Answer rating: 100% (QA)

SOLUTION Based on the provided cash flows here are the calculations for each project Project A 1 Pay... View the full answer