You will be evaluating three projects for Caterpillar Inc.$\text{'}$s cost of capital or discount rate is $11\%.$

The first project $($A$)$ will cost $$25,000$ initially. The project will then return cash flows of $$7,000$ for $4$ years.

The second project $($B$)$ will cost $$30,000$ initially. The project will then return cash flows of $$2,000$ for the next $2$ years and $$20,000$ for $2$ years after that.

The third project $($C$)$ will cost $$28,000$ initially. The project will then return cash flows of $$12,000$ for $3$ years.

Question $1$

What is Project A$\text{'}$s NPV$?$

Question $2$

What is Project A$\text{'}$s IRR?

Question $3$

What is Project A$\text{'}$s Payback Period?

Question $4$

What is Project A$\text{'}$s PI$?$

Question $5$

What is Project B$\text{'}$s NPV$?$

Question $6$

What is Project B$\text{'}$s IRR?

Question $7$

What is Project B$\text{'}$s Payback Period?

Question $8$

What is Project B$\text{'}$s PI$?$

Question $9$

What is Project C$\text{'}$s NPV$?$

Question $10$

What is Project C$\text{'}$s IRR?

Question $11$

What is Project C$\text{'}$s Payback Period?

Question $12$

What is Project C$\text{'}$s PI$?$

Question $13$

If all three projects are INDEPENDENT, which project$($s$)$ would you ACCEPT?

Question $13$ options:

A$)$

Project A

B$)$

Project B

C$)$

Project C

D$)$

Projects A and B

E$)$

Projects A and C

F$)$

Projects B and C

G$)$

Projects A$,$ B$,$ and C

Question $14$

If all three projects are MUTUALLY EXCLUSIVE, which project$($s$)$ would you ACCEPT?

Question $14$ options:

A$)$

Project A

B$)$

Project B

C$)$

Project C

D$)$

Projects A and B

E$)$

Projects A and C

F$)$

Projects B and C

G$)$

Projects A$,$ B$,$ and C