If a calculated number is needed for further calculations, DO NOT round until after all calculations have been completed. For the final answer, Round to 2 decimal places.

Question 1

A firm has a WACC of 12.20% and is deciding between two mutually exclusive projects. Project A has an initial investment of $62.41. The additional cash flows for project A are: year 1 = $15.62, year 2 = $38.32, year 3 = $59.86. Project B has an initial investment of $71.44. The cash flows for project B are: year 1 = $59.94, year 2 = $37.21, year 3 = $23.07. Calculate the Following:

1. Payback Period for Project A:
2. Payback Period for Project B:
3. NPV for Project A:
4. NPV for Project B:

Question 2

Project Z has an initial investment of $52,153.00. The project is expected to have cash inflows of $22,272.00 at the end of each year for the next 14.0 years. The corporation has a WACC of 13.26%. Calculate the NPV for project Z.

Answer rating: 100% (QA)

Question 1 To calculate the payback period for each project we need to determine how long it takes t... View the full answer