Question: Maxwell Software, Inc., has the following mutually exclusive projects. Year Project A Project B 0 $25,000 $28,000 1 14,500 15,500 2 11,000 12,000 3 3,400
| Maxwell Software, Inc., has the following mutually exclusive projects. |
| Year | Project A | Project B |
| 0 | $25,000 | $28,000 |
| 1 | 14,500 | 15,500 |
| 2 | 11,000 | 12,000 |
| 3 | 3,400 | 11,000 |
| a-1. | Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) |
| Payback period | |
| Project A | years |
| Project B | years |
| a-2. | Which, if either, of these projects should be chosen? | |||
|
| b-1. | What is the NPV for each project if the appropriate discount rate is 17 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| NPV | |
| Project A | $ |
| Project B | $ |
| b-2. | Which, if either, of these projects should be chosen if the appropriate discount rate is 17 percent? | |||
|
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