Consider the following projects Cash Flows, $ Project C 0 C 1 D 11,100 22,200 E 21,100 36,925 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 11 a Calculate the profitability index for each project (Do not round intermediate calculations Round your answers to 2 decimal places ) Project Profitability Index D E b1 Calculate the profitability index using the incremental cash flows (Do not round intermediate calculations Round your answer to 2 decimal places ) Profitability index b 2 Which project should you choose Project D Project E rev 03 05 2014 QC 46007

The Answer is in the image, click to view ...

Question: Consider the following projects: Cash Flows, $ Project C 0 C 1 D 11,100 +22,200 E 21,100 +36,925 Assume that the projects are mutually exclusive

Consider the following projects:

	Cash Flows, $
Project	C₀	C₁
D	11,100	+22,200
E	21,100	+36,925

Assume that the projects are mutually exclusive and that the opportunity cost of capital is 11%.

a.	Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Project	Profitability Index
D
E

b1.

Calculate the profitability-index using the incremental cash flows? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Profitability-index

b-2.

Which project should you choose?

	Project D
	Project E

rev: 03_05_2014_QC_46007

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Consider the following projects: Cash Flows ($) Project D E 1 22,200 -11,100 -21,100 34,50 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 11%. a....

14. Consider the following projects: Cash Flows (3) Projects Co C C Ca A -1,000 +000 +200 +200 +1,000 B -1,000 +200 +200 +600 +1,000 C -1,300 +100 +100 +100 +1,600 D -1,300 0 0 +300 +1,600 (a)...

I need help with questions 9 and 10 in the attached file. BBOA3010 Corporate Finance - assignment 2014 Answer all questions. 1. Assume the 1-year spot rate is 4%, the 2-year spot rate is 4.8% and the...

Consider the following projects: Project D E Cash Flows ($) -10,600 -20,600 C1 21,200 36,050 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 11%. a....

Part 1: Consider the following information: Cash Flows ($) Project C 0 C 1 C 2 C 3 C 4 A 5,200 1,200 1,200 3,200 0 B 800 0 750 2,200 3,200 C 5,300 3,300 1,600 700 200 a. What is the payback period on...

Consider the following two cash flows Project X and Project Y. Assume the opportunity cost is 15%. Project X Year Cashflow Project Y Year 0500 Cashflow 301 100 Jun07500 142 300 Feb08 100 143 400...

Hi. Could anyone help me with this set of problems? My father recently passed away and i missed a lot of classes. The professor says I have to go see the Teaching Assistants but I am not in school...

Consider the following projects Cash Flows (5) Project CO -1,000 -2,000 - 3,000 1,000 1.000 1,000 e 4,000 @ 1.000 1.000 CS e 1,000 1,000 @ 1,000 1,000 + o. If the opportunity cost of capital is 10%,...

Consider the following projects: Cash Flows (5) Project CO C D -11,200 22,400 E -21,200 37,100 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 12% a....

Find the tension T in each cable and the magnitude and direction of the force exerted on the strut by the pivot in each of the arrangements in Fig. 11.26. In each case let w be the weight of the...

Explain a standard cost system and how a company uses it.

ancing Stars sells ballet, tap, and jazz shoes. For the upcoming year Dancing Stars plans to sell 1 5 , 0 0 0 ballet shoes, 3 0 , 0 0 0 tap shoes, and 5 , 0 0 0 jazz shoes. What is the ratio of jazz...

According to recent legislation, part - time employees must be offered the same benefits as full - time employees.

=+Select a client, or advertise your advertising services, or your new company's website. Some students and creative talents are developing websites, writing copy, shooting videos, and so on. Create...

=+Part 3 Write copy for one page. You could choose the home page, or about the company, or case study, or whatever page you want. Be sure to include headlines and subheads for each page.

=+AdWord users, and for seasoned pros: http://www.google.com/adwords/smallbusinesscenter/write-great-ads.html.