Capital Budgeting $-$ Homework

What does NPV represem?

What does the IRR represent?

What is the reimestment rate asamption for cach of the NPV and IRR methods?

What does the peybock represent?

When a firm regalarly undertales projects with positive NPVs$,$ will their stock price rise or fall? Explain.

$1-$A company is considering mutually exclusive Projects A and $B,$ which have the following cash flows; which project should be selected if the company is using the paybock method?

$\backslash$table$[[,$Project A$,$Project II$],[$Year$,$Cash Flow,Cash Flow$],[0,-5300,-5300],[1,40,90],[2,60,70],[3,70,120],[4,80,150],[5,100,140]]$

A company is coesidrring Projects $ and L $,$ whose cach dows are iboan below. These projects are mutually exclusive, equally risky, and not ropeatable. Which project should be selected given that the company's feypured rate of relurn is $10\%$

CFs

$C{F}_L$

$\backslash$table$[[0,1,2,3,4],[-$$$2\mathrm{.}050,$$$750,$$$760,$$$770,$$$780$