Suppose you are the financial manager of a firm considering the following five projects (expand below...

 

Transcribed Image Text:

Suppose you are the financial manager of a firm considering the following five projects (expand below to see the five projects). Five Projects Under Construction Five Projects Under Consideration Project A Project B Project C Project D Project E -$150,000 -$140,000 -$60,000 -$1,500 Initial -$100,000 Investment Year 1 $50,000 $50,000 $60,000 $40,000 $1,000 Year 2 $40,000 $50,000 $40,000 $20,000 $250 Year 3 $20,000 $50,000 $35,000 $20,000 $100 Year 4 $10,000 $50,000 $25,000 $20,000 $100 Year 5 $50,000 $20,000 $100 Year 6 $20,000 $100 For this assignment: 1. Calculate the Payback Period for each project. 2. Calculate the NPV for each project, assuming a discount rate of 11.1%. 3. Calculate the IRR for each project. 4. Which projects should the firm implement based on your analysis If the projects are mutually exclusive? What if they are independent and $400,000 in capital funding is available? Suppose you are the financial manager of a firm considering the following five projects (expand below to see the five projects). Five Projects Under Construction Five Projects Under Consideration Project A Project B Project C Project D Project E -$150,000 -$140,000 -$60,000 -$1,500 Initial -$100,000 Investment Year 1 $50,000 $50,000 $60,000 $40,000 $1,000 Year 2 $40,000 $50,000 $40,000 $20,000 $250 Year 3 $20,000 $50,000 $35,000 $20,000 $100 Year 4 $10,000 $50,000 $25,000 $20,000 $100 Year 5 $50,000 $20,000 $100 Year 6 $20,000 $100 For this assignment: 1. Calculate the Payback Period for each project. 2. Calculate the NPV for each project, assuming a discount rate of 11.1%. 3. Calculate the IRR for each project. 4. Which projects should the firm implement based on your analysis If the projects are mutually exclusive? What if they are independent and $400,000 in capital funding is available?

Answer rating: 100% (QA)

To calculate the Payback Period NPV and IRR for each project we need to use the cash flows provided and the given discount rate of 111 Lets perform th... View the full answer