Question
In: Finance
Two mutually exclusive projects have the following forecasted cash flows:
- Two mutually exclusive projects have the following forecasted cash flows:
Year A B
0 -20,000 -20,000
1 10,000 0
2 10,000 0
3 10,000 0
4 10,000 60,000
- Compute the internal rate of return for each project.
- Compute the NPV for each project if the required rate is 10%.
- Which project should be accepted, and why?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Two mutually exclusive projects have the following forecasted cash flows: Year A B 0 -20,000  
Two mutually exclusive projects have the following forecasted
cash flows:
Year
A
B
0
-20,000
-20,000
1
10,000
0
2
10,000
0
3
10,000
0
4
10,000
60,000
Compute the internal rate of return for each project.
Compute the NPV for each project if the required rate is
10%.
Which project should be accepted, and why?
Consider the following two mutually exclusive projects and their Cash Flows ($)
Consider the following two mutually exclusive projects and their
Cash Flows ($)Project
C0 C1 C2
C3K
–$100
+$45 +$45 +$60 W
–$150
+$45 +$45 +$125Which statement is correct based on the above information about
Projects K and W?a. If the discount rate is 7.5%, accept project W because the
cross-over rate is 9%b. Accept project K, because at a 9% discount rate K and W have
the same net present value.c. If the discount rate is 9.5%, reject project K, because the...
Anderson Associates is considering two mutually exclusive projects that have the following cash flows: Project A...
Anderson Associates is considering two mutually exclusive
projects that have the following cash flows: Project A Project B
Year Cash Flow Cash Flow 0 -$10,000 -$8,000 1 4,000 7,000 2 2,000
3,000 3 6,000 1,000 4 8,000 3,000 At what cost of capital do the
two projects have the same net present value? (That is, what is the
crossover rate?) Enter your answer rounded to two decimal places.
Do not enter % in the answer box. For example, if your...
Two projects being considered are mutually exclusive and have the following cash flows: Year Project A...
Two projects being considered are mutually exclusive and have
the following cash flows:
Year
Project A
Project B
0
-$50,000
-$50,000
1
15,000
0
2
15,000
0
3
15,000
0
4
15,000
0
5
15,000
90,000
1) Calculate NPV of each project if
the required rate of return on these projects is 8 percent.
2) which would be chosen and why?
Anderson Associates is considering two mutually exclusive projects that have the following cash flows: Project A...
Anderson Associates is considering two mutually exclusive
projects that have the following cash flows: Project A Project B
Year Cash Flow Cash Flow 0 -$11,000 -$9,000 1 3,500 6,000 2 3,000
4,000 3 5,000 3,000 4 9,000 2,000 At what cost of capital do the
two projects have the same net present value? (That is, what is the
crossover rate?) Enter your answer rounded to two decimal places.
Do not enter % in the answer box. For example, if your...
Anderson Associates is considering two mutually exclusive projects that have the following cash flows: Project A...
Anderson Associates is considering two mutually exclusive
projects that have the following cash flows: Project A Project B
Year Cash Flow Cash Flow 0 -$11,000 -$9,000 1 3,500 6,000 2 3,000
4,000 3 5,000 3,000 4 9,000 2,000 At what cost of capital do the
two projects have the same net present value? (That is, what is the
crossover rate?) Enter your answer rounded to two decimal places.
Do not enter % in the answer box. For example, if your...
Anderson Associates is considering two mutually exclusive projects that have the following cash flows: Project A...
Anderson Associates is considering two mutually exclusive
projects that have the following cash flows: Project A Project B
Year Cash Flow Cash Flow
0 -$11,000 -$9,000
1 4,500 6,000
2 3,000 4,000
3 5,000 3,000
4 9,000 2,000
At what cost of capital do the two projects have the same net
present value? (That is, what is the crossover rate?) Enter your
answer rounded to two decimal places. Do not enter % in the answer
box. For example, if your...
A company is considering two mutually exclusive projects that have the following cash flows: Year Project...
A company is considering two mutually exclusive projects that
have the following cash flows:
Year
Project A Cash
Flow
Project B Cash Flow
0
-$10,000
-$8,000
1
1000
7000
2
2000
1000
3
6000
1000
4
6000
1000
If the company’s required rate of return is 10%, find the
project’s NPV, IRR, PI, and payback period. Which project they
should invest in?
Consider the cash flows from two mutually exclusive projects
Use the following information to answer the next three questions. Consider the cash flows from two mutually exclusive projects: Cash FlowYearProject AProject B0-$420,000-$420,0001$140,000$400,0002$230,000$110,0003$331,000$140,000The appropriate discount rate is 8.5%.Calculate the internal rate of return (IRR) for both projects, and determine which project should be accepted based on IRR.
Jamison is considering two mutually exclusive projects with the following cash flows and the cost of...
Jamison is considering two mutually exclusive projects with the
following cash flows and the cost of capital of 10%.
Year XX YY
0 -$1,000 -$1,200
1 $800 $700
2 $800 $700
3 $700
a) Based on Annualized NPV, which project would you choose? Why
ANPV is better than NPV in this case.?
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