Question: please lable all work Chapter 8 Question 17 Input area: Annual cash flows: Year 0 Year 1 Year 2 Year 3 Year 4 69 69
Chapter 8 Question 17 Input area: Annual cash flows: Year 0 Year 1 Year 2 Year 3 Year 4 69 69 69 69 Y (43,400) 19,800 17.500 20,700 14,600 3 $ $ $ Z (78,000) 32,000 30,100 29,500 27.300 Required return 12% Output area: a. PL (Y) PI (Z) Profitability index criterion implies accept because its Pl is larger b. NPV (Y) NPV (Z) NPV criterion implies accept because it has a higher NPV C. The only decision rule that can rank mutually exclusive projects. is NPV. Therefore you should accept
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