Question: Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $427,000 $41,000 1 43,000 20,600 2 63,000 13,100 3 80,000
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $427,000 $41,000 1 43,000 20,600 2 63,000 13,100 3 80,000 19,600 4 542,000 16,400 The required return on these investments is 13 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).) (b) What is the NPV for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) (c) What is the IRR for each project? (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) (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).)
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