In: Finance
Consider the following two mutually exclusive projects: |
Year | Cash Flow (A) | Cash Flow (B) |
0 | –$346,645 | –$15,285 |
1 | 25,600 | 4,430 |
2 | 56,000 | 8,801 |
3 | 52,000 | 13,411 |
4 | 381,000 | 8,523 |
Whichever project you choose, if any, you require a 6 percent return on your investment. |
Required: |
(a) | What is the payback period for Project A? |
(Click to select) 3.74 years 3.56 years 3.45 years 3.67 years 3.38 years |
(b) | What is the payback period for Project B? |
(Click to select) 2.05 years 2.15 years 2.22 years 2.09 years 2.26 years |
(c) | What is the discounted payback period for Project A? |
(Click to select) 3.95 years 3.76 years 3.57 years 3.65 years 3.87 years |
(d) | What is the discounted payback period for Project B? |
(Click to select) 2.41 years 2.18 years 2.36 years 2.29 years 2.22 years |
(e) | What is the NPV for Project A? |
(Click to select) $70,609.82 $74,977.44 $72,793.63 $69,153.95 $76,433.31 |
(f) | What is the NPV for Project B ? |
(Click to select) $15,180.4 $14,296.1 $15,475.17 $14,001.34 $14,738.25 |
(g) | What is the IRR for Project A? |
(Click to select) 12.6% 12% 12.36% 11.64% 11.4% |
(h) | What is the IRR for Project B? |
(Click to select) 39.14% 38% 36.86% 39.9% 36.1% |
(i) | What is the profitability index for Project A? |
(Click to select) 1.174 1.246 1.149 1.21 1.27 |
(j) | What is the profitability index for Project B? |
(Click to select) 2.023 1.964 1.866 1.905 2.062 |