Question
In: Finance
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as...
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. The required rate of return on projects of both of their risk class is 10 percent, and the maximum allowable payback and discounted payback statistic for the projects are two and a half and three and a half years, respectively. Calculate the payback and use the payback decision rule to evaluate these projects; which one(s) should be accepted or rejected and why? Trying to solve manually with calculator and not in excel.
| time | 0 | 1 | 2 | 3 |
| project a | -1,000 | 300 | 400 | 700 |
| project b | -500 | 200 | 400 | 300 |
Solutions
jeff jeffy answered 8 months agoRelated Solutions
9. Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown...
9. Suppose your firm is considering two mutually exclusive,
required projects with the cash flows shown below. The required
rate of return on projects of both of their risk class is 8
percent, and that the maximum allowable payback and discounted
payback statistic for the projects are 2 and 3 years,
respectively.
Time:
0
1
2
3
Project A Cash Flow
-25,000
15,000
35,000
6,000
Project B Cash Flow
-35,000
15,000
25,000
55,000
Use the NPV decision rule to evaluate...
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below....
Suppose your firm is considering two mutually exclusive,
required projects with the cash flows shown below. The required
rate of return on projects of both of their risk class is 8
percent, and that the maximum allowable payback and discounted
payback statistic for the projects are 2 and 3 years, respectively.
Time: 0 1 2 3 Project A Cash Flow -25,000 15,000 35,000 6,000
Project B Cash Flow -35,000 15,000 25,000 55,000 Use the discounted
payback decision rule to evaluate...
1. Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown...
1.
Suppose your firm is considering two mutually exclusive, required
projects with the cash flows shown as follows. The required rate of
return on projects of both of their risk class is 8 percent, and
the maximum allowable payback and discounted payback statistic for
the projects are two and three years, respectively.
Time
0
1
2
3
Project A Cash Flow
?20,000
10,000
30,000
1,000
Project B Cash Flow
?30,000
10,000
20,000
50,000
Use the discounted payback decision rule to...
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below....
Suppose your firm is considering two mutually exclusive,
required projects with the cash flows shown below. The required
rate of return on projects of both of their risk class is 11
percent, and that the maximum allowable payback and discounted
payback statistic for the projects are 2 and 3 years,
respectively.
Time:
0
1
2
3
Project A Cash
Flow
-38,000
28,000
48,000
19,000
Project B Cash
Flow
-48,000
28,000
38,000
68,000
Use the discounted payback decision rule to evaluate...
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below....
Suppose your firm is considering two mutually exclusive,
required projects with the cash flows shown below. The required
rate of return on projects of both of their risk class is 9
percent, and that the maximum allowable payback and discounted
payback statistic for the projects are 2 and 3 years, respectively.
Time: 0 1 2 3 Project A Cash Flow -21,000 11,000 31,000 2,000
Project B Cash Flow -31,000 11,000 21,000 51,000 Use the discounted
payback decision rule to evaluate...
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below....
Suppose your firm is considering two mutually exclusive,
required projects with the cash flows shown below. The required
rate of return on projects of both of their risk class is 8
percent, and that the maximum allowable payback and discounted
payback statistic for the projects are 2 and 3 years, respectively.
Time: 0 1 2 3 Project A Cash Flow -20,000 10,000 30,000 1,000
Project B Cash Flow -30,000 10,000 20,000 50,000
Use the NPV decision rule to evaluate these...
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below....
Suppose your firm is considering two mutually exclusive,
required projects with the cash flows shown below. The required
rate of return on projects of both of their risk class is 8
percent, and that the maximum allowable payback and discounted
payback statistic for the projects are 2 and 3 years,
respectively.
time
0
1
2
3
project A cash flow
-25,000
15,000
35,000
6,000
project B cash flow
-35,000
15,000
25,000
55,000
Time: 0 1 2 3 Project A Cash...
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below....
Suppose your firm is considering two mutually exclusive,
required projects with the cash flows shown below. The required
rate of return on projects of both of their risk class is 10
percent, and that the maximum allowable payback and discounted
payback statistic for the projects are 2 and 3 years,
respectively.
Time:
0
1
2
3
Project A Cash Flow
-27,000
17,000
37,000
8,000
Project B Cash Flow
-37,000
17,000
27,000
57,000
Use the PI decision rule to evaluate these...
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below....
Suppose your firm is considering two mutually exclusive,
required projects with the cash flows shown below. The required
rate of return on projects of both of their risk class is 12
percent, and that the maximum allowable payback and discounted
payback statistic for the projects are 2 and 3 years,
respectively.
Time: 0 1 2 3
Project A Cash Flow -39,000 29,000 49,000 20,000
Project B Cash Flow -49,000 29,000 39,000 69,000
Use the PI decision rule to evaluate these...
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below....
Suppose your firm is considering two mutually exclusive,
required projects with the cash flows shown below. The required
rate of return on projects of both of their risk class is 8
percent, and that the maximum allowable payback and discounted
payback statistic for the projects are 2 and 3 years,
respectively.
Time: 0 1 2 3
Project A Cash Flow: -30,000 20,000 40,000 11,000
Project B Cash Flow: -40,000 20,000 30,000 60,000
Use the NPV decision rule to evaluate these...
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