Question: Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 01234 -$ 431,000 -$ 43,000 41,000 21,000 65,000 12,700 21,600
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 01234 -$ 431,000 -$ 43,000 41,000 21,000 65,000 12,700 21,600 18,400 82,000 546,000 The required return on these investments is 12 percent. a. What is the payback period for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.y., 32.16. b. What is the NPV for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. c. What is the IRR for each project? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32 d. What is the profitability index for each project? Note: Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161. e. Based on your answers in (a) through (d), which project will you finally choose?
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