Question
In: Finance
consider the following two mutually exclusive projects what is the cross over rate for these two...
consider the following two mutually exclusive projects
what is the cross over rate for these two projects
| year | cash flow x | cash flow y |
| 0 | -19700 | -19700 |
| 1 | 8775 | 9950 |
| 2 | 8950 | 7725 |
| 3 | 8725 | 8625 |
Solutions
jeff jeffy answered 1 month agoRelated Solutions
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...
Question 3 Consider the following two mutually exclusive projects. The required rate of return is 10%....
Question 3
Consider the following two mutually exclusive projects. The
required rate of return is 10%.
Part A: Calculate the NPV for each project.
Year
Project A
Project B
0
-$100,000
-$100,000
1
30,000
80,000
2
40,000
20,000
3
60,000
20,000
Part B: Calculate the IRR for each project.
Part C: Calculate the payback period for each
project.
Part D: Suppose you were the manager deciding
between these two projects. Would you prefer to use the payback
period decision rule...
Consider the following cash flows for two mutually exclusive capital investment projects. The required rate of...
Consider the following cash flows for two mutually exclusive
capital investment projects. The required rate of return is 16%.
Use this information for the next 3 questions. Year Project A Cash
Flow Project B Cash Flow 0 ($50,000) ($20,000) 1 15,000 6,000 2
15,000 6,000 3 15,000 6,000 4 13,500 5,400 5 13,500 5,400 6 6,750
5,400 Calculate the net present value of project A.
Answers:
a.342.28 b.1564.25 c.1245.11 d. 2709.21 e. 3802
Consider the following cash flows for two mutually exclusive capital investment projects. The required rate of...
Consider the following cash flows for two mutually exclusive
capital investment projects. The required rate of return is 15%.
Use this
Year Project A
Cash Flow Project B
Cash Flow
0 -$40,000 -$30,000
1 12,000 9,000
2 12,000 9,000
3 12,000 9,000
4 10,800
8,100
5 10,800 8,100
6 5,400
8,100
9. Which of the following statements is true concerning projects A
and B?
a) Both NPV and IRR lead to the same investment decision.
b) Due to time disparity, IRR indicates that project A should be
accepted and NPV indicates that project B...
You are considering the following two mutually exclusive projects. The crossover rate between these two projects...
You are considering the following two mutually exclusive
projects. The crossover rate between these two projects is ___
percent and Project ___ should be accepted if the required return
is greater than the crossover rate.
Year
Project A
Project B
0
−$26,000
−$26,000
1
9,500
17,590
2
9,500
7,500
3
17,500
9,610
rev: 05_02_2019_QC_CS-167236, 05_09_2019_QC_CS-168369,
09_24_2019_QC_CS-182411
Multiple Choice
18.39%; A
11.89%; B
16.97%; B
11.89%; A
16.97%; A
You are considering the following two mutually exclusive projects. The crossover rate between these two projects...
You are considering the following two mutually exclusive
projects. The crossover rate between these two projects is ___
percent and Project ___ should be accepted if the required return
is greaterthan the crossover rate.
Year
Project A
Project B
0
−$30,000
−$30,000
1
11,500
19,630
2
11,500
9,500
3
19,500
11,650
You are considering the following two mutually exclusive projects. The crossover rate between these two projects...
You are considering
the following two mutually exclusive projects. The crossover rate
between these two projects is ___ percent and Project ___ should be
accepted if the required return is greater than the crossover
rate.
Year
Project A
Project B
0
−$24,000
−$24,000
1
8,500
16,570
2
8,500
6,500
3
16,500
8,590
Multiple Choice
12.17%; B
12.17%; A
17.82%; A
16.49%; A
16.49%; B
You are considering the following two mutually exclusive projects. The crossover rate between these two projects...
You are considering the following two mutually exclusive
projects. The crossover rate between these two projects is ___
percent and Project ___ should be accepted if the required return
is greater than the crossover rate.
Year
Project A
Project B
0
−$39,000
−$39,000
1
21,500
13,720
2
13,500
11,500
3
13,500
25,600
12.85%; B
12.52%; A
12.52%; B
12.93%; A
12.93%; B
Consider the following two mutually exclusive project. Relevant discount rate for both projects are 12 percent....
Consider the following two mutually exclusive project. Relevant
discount rate for both projects are 12 percent.
Year CF Project A (Rp) CF Project B (Rp)
0 (2,000,000) (2,300,000)
1 900,000 550,000
2 800,000 650,000
3 950,000 708,000
4 978,000 1,155,000
5 300,000 2,000,000
a. If you apply the discounted payback criterion, which project
will you choose? Why?
b. If you apply the IRR criterion, which project will you
choose? Why?
Hint: Range A: 29-31% ; Range B: 24-26%
c. If...
Consider the following cash flows of two mutually exclusive projects for AZ-Motorcars. Assume the discount rate...
Consider the following cash flows of two mutually exclusive
projects for AZ-Motorcars. Assume the discount rate for
AZ-Motorcars is 8 percent. Year 0 AZM mini-suv 480000 AZF full-suv
830000 year1 azm mini-suv 326000 azf full suv 356000 year 2 azm
mini-suv 192000 azf full-suv 432000 year 3 azm mini suv 156000 azf
full-suv 296000
what is the payback period for each project?
what is the NPV for each project?
what is the IRR for each project?
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