Question: 6 30 points Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $433,000 -$44,000 1 40,000 21,200 2 66,000
6 30 points Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $433,000 -$44,000 1 40,000 21,200 2 66,000 12,500 3 83,000 22,600 548.000 19,400 eBook ASK Print 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.) 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.) 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.) 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.) e. Based on your answers in (a) through (d), which project will you finally choose? References years years a. Project Project B b. Project Project B c. Project A Project B d. Project Projects e. % %
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
