Question: Please show your full steps even if you are using a financial calculator. 5} Quattro, Inc. has the following mutually exclusive projects available. The company



Please show your full steps even if you are using a financial calculator.



5} Quattro, Inc. has the following mutually exclusive projects available. The company has historically used a four-year cutoff for projects. The required return is 1 1 percent. g Cosh Flow [Al Cosh Flow {B} 0 $82000 $125000 1 l 5, 3'00 38. 600 2 l 8. 300 33. 400 3 23. 900 31 .200 4 26. 200 2? , 500 5 32. I 00 24. 000 The payback for Project A is _ while the payback for Project B :is . The NPlrT for Project A is while the NPV for Project B is _. Which project, if any, should the company accept? a. 3.92 years; 3.154 years; $7130.35; $1,21 1.43; accept both Project A and B . 3.92 years; 3.?9 years; $211.61}; $1,211.48; accept Project B only 3.92 years; 3.?9 years; $930.35; $9,945.93; accept Project A only . 4.915 years; 3.154 years; $180.35; $1,21 1.43; accept both Project A and B 4.96 years; 3.?9 years; -$21 1.61}; $1945.93; reject both projects :1 h c e 6) Investors require a 4 percent return on risk-free investments. On a particular risky investment, investors require an excess return of 7 percent in addition to the risk-free rate of 4 percent. What is this excess return called? a. Inflation premium b. Required return c. Real return d. Average return e. Risk premium7) A project is expected to create operating cash flows of $25,000 a year for three years. The initial cost of the fixed assets is $52,000. These assets will be worthless at the end of the project. An additional $3,500 of net working capital will be required throughout the life of the project. What is the project's net present value if the required rate of return is 12 percent? a. $10,537.01 b. $4,545.78 c. $3,537.01 d. $7,037.01 e. $1,958.33
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