Consider the data for the following two projects, Beta and Zeta: Year Cash Flow (Beta) Cash...
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Consider the data for the following two projects, Beta and Zeta: Year Cash Flow (Beta) Cash Flow (Zeta) -€35,000 -€36,000 18,000 15,000 13,000 0 1 2 3 I 17,000 14,000 12,000 Instructions: 1. Using company cost of capital 12%, calculate the following investment criteria for both projects: a. Payback period (5 points) b. Net Present Value (NPV) (5 points) c. Internal Rate of Return (IRR) (5 points) d. Profitability Index (Pl) (5 points) 2. If projects Beta and Zeta are independent, which one(s) will you choose? Why? 3. If projects Beta and Zeta are mutually exclusive, which one will you choose? Why? (5 points) (5 points) Consider the data for the following two projects, Beta and Zeta: Year Cash Flow (Beta) Cash Flow (Zeta) -€35,000 -€36,000 18,000 15,000 13,000 0 1 2 3 I 17,000 14,000 12,000 Instructions: 1. Using company cost of capital 12%, calculate the following investment criteria for both projects: a. Payback period (5 points) b. Net Present Value (NPV) (5 points) c. Internal Rate of Return (IRR) (5 points) d. Profitability Index (Pl) (5 points) 2. If projects Beta and Zeta are independent, which one(s) will you choose? Why? 3. If projects Beta and Zeta are mutually exclusive, which one will you choose? Why? (5 points) (5 points)
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Related Book For
Cornerstones of Managerial Accounting
ISBN: 978-0176530884
2nd Canadian edition
Authors: Maryanne M. Mowen, Don Hanson, Dan L. Heitger, David McConomy, Jeffrey Pittman
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