Question: Fuji Software Inc. has the following mutually exclusive projects. Year Project A Project B 0 $ 15,000 $ 18,000 1 9,500 10,500 2 6,000 7,000
Fuji Software Inc. has the following mutually exclusive projects.
| Year | Project A | Project B | ||
| 0 | $ | 15,000 | $ | 18,000 |
| 1 | 9,500 | 10,500 | ||
| 2 | 6,000 | 7,000 | ||
| 3 | 2,400 | 6,000 | ||
a-1. Calculate the payback period for each project. (Do not round intermediate calculations. Round the answers to 3 decimal places.)
| Payback period | ||
| Project A | years | |
| Project B | years | |
a-2. Which, if either, of these projects should be chosen?
multiple choice 1
-
Project A
-
Project B
-
Both projects
-
Neither project
b-1. What is the NPV for each project if the appropriate discount rate is 15 percent? (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Round the answers to 2 decimal places. Omit $ sign in your response.)
| NPV | ||
| Project A | $ | |
| Project B | $ | |
b-2. Which, if either, of these projects should be chosen if the appropriate discount rate is 15 percent?
multiple choice 2
-
Project A
-
Project B
-
Both projects
-
Neither project
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