Question: Problem 1 0 - 1 0 Capital Budgeting Methods Project S has a cost of $ 1 1 , 0 0 0 and is expected

Problem 10-10
Capital Budgeting Methods
Project S has a cost of $11,000 and is expected to produce benefits (cash flows) of $3,400 per year for 5 years. Project L costs $23,000 and is expected to produce cash flows of $6,900 per year for 5 years.
Calculate the two projects' NPVs, assuming a cost of capital of 14%. Round your answers to the nearest cent.
Project S $
Project L $
Which project would be selected, assuming they are mutually exclusive?
Project L
Calculate the two projects' IRRs. Round your answers to two decimal places.
Project S
%
Project L
%
Which project would be selected, assuming they are mutually exclusive?
Project S
Calculate the two projects' MIRRs, assuming a cost of capital of 14%. Round your answers to two decimal places.
Project S
%
Project L
%
Which project would be selected, assuming they are mutually exclusive?
Project S
Calculate the two projects' PIs, assuming a cost of capital of 14%. Round your answers to two decimal places.
Project S
Project L
Which project would be selected, assuming they are mutually exclusive?
Project S
Which project should actually be selected?
Project L

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