Project S has a cost of $11,000 and is expected to produce benefits (cash flows) of...

  

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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%. Do not round intermediate calculations. Round your answers to the nearest cent. Project S: $ * Project L: $ * Which project would be selected, assuming they are mutually exclusive? Calculate the two projects' IRRS. Do not round intermediate calculations. Round your answers to two decimal places. Project S: % Project L: Which project would be selected, assuming they are mutually exclusive? % Calculate the two projects' MIRRS, assuming a cost of capital of 14%. Do not round intermediate calculations. Round your answers to two decimal places. Project S: % Project L: Which project would be selected, assuming they are mutually exclusive? Based on the MIRR values, Project L would be selected. Calculate the two projects' PIs, assuming a cost of capital of 14%. Do not round intermediate calculations. Round your answers to three decimal places. Project S: * % Project L: Which project would be selected, assuming they are mutually exclusive? Based on the PI values, -Select- would be selected. Which project should actually be selected? 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%. Do not round intermediate calculations. Round your answers to the nearest cent. Project S: $ * Project L: $ * Which project would be selected, assuming they are mutually exclusive? Calculate the two projects' IRRS. Do not round intermediate calculations. Round your answers to two decimal places. Project S: % Project L: Which project would be selected, assuming they are mutually exclusive? % Calculate the two projects' MIRRS, assuming a cost of capital of 14%. Do not round intermediate calculations. Round your answers to two decimal places. Project S: % Project L: Which project would be selected, assuming they are mutually exclusive? Based on the MIRR values, Project L would be selected. Calculate the two projects' PIs, assuming a cost of capital of 14%. Do not round intermediate calculations. Round your answers to three decimal places. Project S: * % Project L: Which project would be selected, assuming they are mutually exclusive? Based on the PI values, -Select- would be selected. Which project should actually be selected?

Answer rating: 100% (QA)

SOLUTION To calculate the net present value NPV of a project we need to discount the cash flows using the cost of capital The formula for NPV is NPV Sum of Cash flows 1 Cost of capitalt Where Cash flo... View the full answer