nts Pisnt eferences Britney Javelin Company is considering two investments, both of which cost $40,000. The...

Transcribed Image Text:

nts Pisnt eferences Britney Javelin Company is considering two investments, both of which cost $40,000. The cash flows are as follows: Use Appendix B and Appendix D, Year 1 Project Al $18,000 Project B $17,000 2 3 22,000 10,000 22,700) 15,000 a. Calculate the payback period for project A and project B. (Round the final answers to 2 decimal places.) Project A Project B Payback period years years b-1. Calculate the NPV for project A and project B. Assume a cost of capital of 12 percent. (Round "PV Factor" to 3 decimal places. Round the intermediate and final answers to the nearest whole dollar.) Project A Project B Net present value. $ b-2. Which of the two projects should be chosen based on the NPV method? O Project A 3 a. Calculate the payback period for project A and project B. (Round the final answers to 2 decimal places.) Print erences Project A Project B Payback period years years b-1. Calculate the NPV for project A and project B. Assume a cost of capital of 12 percent. (Round "PV Factor" to 3 decimal places. Round the intermediate and final answers to the nearest whole dollar.) Project A Project B Net present value b-2. Which of the two projects should be chosen based on the NPV method? O Project A O Project B O Both c. Should a firm normally have more confidence in answer derived based on NPV method or Payback method? O NPV method Pay back method nts Pisnt eferences Britney Javelin Company is considering two investments, both of which cost $40,000. The cash flows are as follows: Use Appendix B and Appendix D, Year 1 Project Al $18,000 Project B $17,000 2 3 22,000 10,000 22,700) 15,000 a. Calculate the payback period for project A and project B. (Round the final answers to 2 decimal places.) Project A Project B Payback period years years b-1. Calculate the NPV for project A and project B. Assume a cost of capital of 12 percent. (Round "PV Factor" to 3 decimal places. Round the intermediate and final answers to the nearest whole dollar.) Project A Project B Net present value. $ b-2. Which of the two projects should be chosen based on the NPV method? O Project A 3 a. Calculate the payback period for project A and project B. (Round the final answers to 2 decimal places.) Print erences Project A Project B Payback period years years b-1. Calculate the NPV for project A and project B. Assume a cost of capital of 12 percent. (Round "PV Factor" to 3 decimal places. Round the intermediate and final answers to the nearest whole dollar.) Project A Project B Net present value b-2. Which of the two projects should be chosen based on the NPV method? O Project A O Project B O Both c. Should a firm normally have more confidence in answer derived based on NPV method or Payback method? O NPV method Pay back method