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
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 |
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To calculate the payback period discounted payback period net present value NPV internal rate of return IRR and profitability index for each project we need to consider the cash flows and the required ... View full answer
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