Question
In: Finance
Apple's Project NPV ($) 10,258 IRR (%) 13 MIRR (%) 10 PI 1.5 Payback (Years) 3...
| Apple's Project | |
| NPV ($) | 10,258 |
| IRR (%) | 13 |
| MIRR (%) | 10 |
| PI | 1.5 |
| Payback (Years) | 3 |
| Discounted Payback (years) | 3.5 |
Apple's cost of capital is 9%. Its critical payback and discounted payback periods are 2 and 2.5. Should the project be accepted or not.
NPV - (Accept or Do Not Accept)
IRR - (Accept or Do Not Accept)
MIRR - (Accept or Do Not Accept)
PI - (Accept or Do Not Accept)
Payback - (Accept or Do Not Accept)
Discounted Payback - (Accept or Do Not Accept)
Solutions
Expert Solution
NPV - (Accept or Do Not Accept)
If NPV>0 Accept the project
NPV = 10,258
NPV > 0
NPV - Accept
IRR - (Accept or Do Not Accept)
If IRR> Cost of Capital Accept the project
IRR Value = 13%
IRR (13%) > Cost of Capital(9%)
IRR - Accept
MIRR - (Accept or Do Not Accept)
If MIRR> Cost of Capital Accept theproject
MIRR = 10%
IRR (10%) > Cost of Capital(9%)
MIRR - Accept
PI - (Accept or Do Not Accept)
If Profitability Index PI > 01 Accept the Project
PI>01
PI - Accept
Payback - (Accept or Do Not Accept)
IF Payback Period < Required Payback Accept the Project
Payback Period = 3
Required Payback Accept the Project = 02
Payback Period 3 > Required Payback Accept the Project (02)
Payback Do Not Accept
Discounted Payback - (Accept or Do Not Accept)
IF Discounted Payback Period < Discounted Required Payback Accept the Project
Discounted Payback Period = 3.5
Discounted Required Payback Accept the Project = 2.5
Discounted Payback Period 3.5 > Discounted Required Payback Accept the Project 2.5
Discounted Payback Do Not Accept
jeff jeffy answered 2 years agoRelated Solutions
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Year
Investment A
Investment B
0
-$5,000,000
-5,000,000
1
$1,500,000
$1,250,000
2
$1,500,000
$1,250,000
3
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$1,250,000
4
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5
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$1,250,000
6
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Please calculate the payback period, IRR, MIRR, NPV, and PI for the following two mutually exclusive...
Please calculate the payback period, IRR, MIRR, NPV, and
PI for the following two mutually exclusive projects. The required
rate of return is 15% and the target payback is 4 years. Explain
which project is preferable under each of the four capital
budgeting methods mentioned above:
Table 1
Cash flows for two mutually exclusive
projects
Year
Investment A
Investment B
0
-$5,000,000
-5,000,000
1
$1,500,000
$1,250,000
2
$1,500,000
$1,250,000
3
$1,500,000
$1,250,000
4
$1,500,000
$1,250,000
5
$1,500,000
$1,250,000
6
$1,500,000...
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