In: Finance
Capital Budgeting Methods
Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year for 5 years. Project L costs $25,000 and is expected to produce cash flows of $7,300 per year for 5 years.
Calculate the two projects' NPVs, assuming a cost of capital of 12%. Round your answers to the nearest cent.
Project S | $ |
Project L | $ |
Which project would be selected, assuming they are mutually
exclusive?
-Select-Project SProject LItem 3
Project S | % |
Project L | % |
Which project would be selected, assuming they are mutually
exclusive?
-Select-Project SProject LItem 6
Calculate the two projects' MIRRs, assuming a cost of capital of 12%. Round your answers to two decimal places.
Project S | % |
Project L | % |
Which project would be selected, assuming they are mutually
exclusive?
-Select-Project SProject LItem 9
Project S | |
Project L |
Which project would be selected, assuming they are mutually
exclusive?
-Select-Project SProject LItem 12
Which project should actually be selected?
-Select-Project SProject LItem 13