All techniques, conflicting rankings Nicholson Roofing Materials, Inc., is considering two mutually exclusive projects, each with...
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All techniques, conflicting rankings Nicholson Roofing Materials, Inc., is considering two mutually exclusive projects, each with an initial investment of $160,000. The company's board of directors has set a 4-year payback requirement and has set its cost of capital at 10%. The cash inflows associated with the two projects are shown in the following table: E a. Calculate the payback period for each project. Rank the projects by payback period. b. Calculate the NPV of each project. Rank the project by NPV. c. Calculate the IRR of each project. Rank the project by IRR. d. Make a recommendation. - X Data Table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) a. The payback period of project A is years. (Round to two decimal places.) Cash inflows (CF) Project B $75,000 Year Project A 1 $50,000 2 $50,000 $50,000 3 $50,000 $40,000 4 $50,000 $40,000 5 $50,000 $40,000 $50,000 $40,000 All techniques, conflicting rankings Nicholson Roofing Materials, Inc., is considering two mutually exclusive projects, each with an initial investment of $160,000. The company's board of directors has set a 4-year payback requirement and has set its cost of capital at 10%. The cash inflows associated with the two projects are shown in the following table: E a. Calculate the payback period for each project. Rank the projects by payback period. b. Calculate the NPV of each project. Rank the project by NPV. c. Calculate the IRR of each project. Rank the project by IRR. d. Make a recommendation. - X Data Table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) a. The payback period of project A is years. (Round to two decimal places.) Cash inflows (CF) Project B $75,000 Year Project A 1 $50,000 2 $50,000 $50,000 3 $50,000 $40,000 4 $50,000 $40,000 5 $50,000 $40,000 $50,000 $40,000
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Answer a iPayback period is the time taken for the cumulative cash flows ... View the full answer
Related Book For
Principles Of Managerial Finance
ISBN: 978-0136119463
13th Edition
Authors: Lawrence J. Gitman, Chad J. Zutter
Posted Date:
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