Management of Pharoah, Inc., is currently evaluating three independent projects. All three projects cost the same...

 

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Management of Pharoah, Inc., is currently evaluating three independent projects. All three projects cost the same at $845,000. Expected cash flow streams are shown in the following table. Project 1 Project 3 n 1 2 3 $ $ $ $ 0 153,700 $ 586,500 $ 0 0 Project 3 $ 210,840 $ 148.250 625,000 $ 289,300 416,200 $ 588,000 $ 483,500 1. Assume the cost of funds is 11.3 percent. What is the NPV of each project? • NPV of project 1 is 5$ . [Select] • NPV of project 2 is $ [Select] • NPV of project 3 is $ [Select] 2. Based on the above NPV, which projects would be accepted? Management of Pharoah, Inc., is currently evaluating three independent projects. All three projects cost the same at $845,000. Expected cash flow streams are shown in the following table. Project 1 Project 3 n 1 2 3 $ $ $ $ 0 153,700 $ 586,500 $ 0 0 Project 3 $ 210,840 $ 148.250 625,000 $ 289,300 416,200 $ 588,000 $ 483,500 1. Assume the cost of funds is 11.3 percent. What is the NPV of each project? • NPV of project 1 is 5$ . [Select] • NPV of project 2 is $ [Select] • NPV of project 3 is $ [Select] 2. Based on the above NPV, which projects would be accepted?

Answer rating: 100% (QA)

To calculate the NPV Net Present Value of each project we need to discount the expected cash flows a... View the full answer