Question: Consider the following two mutually exclusive projects: Cash Flow (A) -$65,000 35,000 27.000 25,000 41,000 Cash Flow (B) -$250,000 25,000 70,000 70.000 320,000 Year 0
Consider the following two mutually exclusive projects: Cash Flow (A) -$65,000 35,000 27.000 25,000 41,000 Cash Flow (B) -$250,000 25,000 70,000 70.000 320,000 Year 0 3 The required return on these investments is 10 percent. Required: (a) What is the payback period for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Payback period years Project A Project B years (b) What is the NPV for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g.,32.16)) Net present value Project A Project B (c) What is the IRR for each project? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Internal rate of retun Project A Project B % % (d) What is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 3 decimal places (e.g., 32.161).) Profitability index Project A Project B (e) Based only on the projects' NPV and IRR, which project should you finally choose? (Click to select) O12en
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