Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $ 357,000
Question:
Consider the following two mutually exclusive projects:
Year | Cash Flow (A) | Cash Flow (B) | |||||
0 | –$ | 357,000 | –$ | 46,500 | |||
1 | 38,000 | 23,300 | |||||
2 | 58,000 | 21,300 | |||||
3 | 58,000 | 18,800 | |||||
4 | 433,000 | 13,900 |
Whichever project you choose, if any, you require a 14 percent return on your investment.
What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Project A | years |
Project B | years |
What is the discounted payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Project A | years |
Project B | years |
What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Project A | $ | |
Project B | $ | |
What is the IRR for each project? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Project A | % |
Project B | % |
What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.)
Project A | |
Project B |
Financial Management Theory and Practice
ISBN: 978-1305632295
15th edition
Authors: Eugene F. Brigham, Michael C. Ehrhardt