Question
In: Finance
Costco is evaluating three projects and will select the one with the highest PI. The company's...
Costco is evaluating three projects and will select the one with the highest PI. The company's cost of capital is 14.5%. Which project should Costco choose?
| IRR | Investment | CF - Y1 | CF - Y2 | CF - Y3 | |
| Project A | 11.00% | 75,000 | 35,000 | 40,000 | 45,000 |
| Project B | 15.00% | 90,000 | 55,000 | 50,000 | 43,000 |
| Project C | 15.00% | 50,000 | 40,000 | 25,000 | 11,000 |
| a. |
Project A |
|
| b. |
Project B |
|
| c. |
Project C |
|
| d. |
None of the above |
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Costco is evaluating three projects and will select the one with the highest PI. The company's...
Costco is evaluating three projects and will select the one with
the highest PI. The company's cost of capital is 14.5%. Which
project should Costco choose?
IRR
Investment
CF - Y1
CF - Y2
CF - Y3
Project A
11.00%
75,000
35,000
40,000
45,000
Project B
15.00%
90,000
55,000
50,000
43,000
Project C
15.00%
50,000
40,000
25,000
11,000
a.
Project A
b.
Project B
c.
Project C
d.
None of the above
Costco is evaluating three projects and will select the one with the highest NPV. The company's...
Costco is evaluating three projects and will select the one with
the highest NPV. The company's cost of capital is 14.5%. Which
project should Costco choose?
IRR
Investment
CF - Y1
CF - Y2
CF - Y3
Project A
11.00%
75,000
35,000
40,000
45,000
Project B
15.00%
90,000
55,000
50,000
43,000
Project C
15.00%
50,000
40,000
25,000
11,000
a.
Project A
b.
Project B
c.
Project C
d.
None of the above
Good Morning Food, Inc. is using the profitability index (PI) when evaluating projects. You have to...
Good Morning Food, Inc. is using the profitability index (PI)
when evaluating projects. You have to find the PI for the company’s
project, assuming the company’s cost of capital is 9.92 percent.
The initial outlay for the project is $368,538. The project will
produce the following end-of-the-year after-tax cash inflows of
Year 1: $155,548
Year 2: $144,874
Year 3: $15,293
Year 4: $374,481
Round the answer to two decimal places.
How do I do this in excel?
Good Morning Food, Inc. is using the profitability index (PI) when evaluating projects. You have to...
Good Morning Food, Inc. is using the profitability index (PI)
when evaluating projects. You have to find the PI for the company’s
project, assuming the company’s cost of capital is 6.11 percent.
The initial outlay for the project is $498,112. The project will
produce the following end-of-the-year after-tax cash inflows of
Year 1: $148,444
Year 2: $92,435
Year 3: $171,330
Year 4: $436,132
Which of the following would produced the highest voltage in a galvanic cell? Select one: a....
Which of the following would produced the highest voltage in a
galvanic cell?
Select one:
a. 2Cr(s) + 3Ni2+(aq) →
2Cr3+ (aq) + 3Ni(s)
b. Li(s) + Ag+(aq) → Li+
(aq) + Ag(s)
c. Mg(s) + Zn2+(aq) →
Mg2+ (aq) + Zn(s)
d. Na(s) + K+(aq) → Na+
(aq) + K(s)
You are a project manager evaluating the following three projects Year Project A &
You are a project manager evaluating the following three
projects
Year
Project
A
Project
B
Project C
0
-$150,000
-$300,000
-$150,000
1
$110,000
$200,000
$120,000
2
$110,000
$200,000
$90,000
The relevant discount rate ( r ) is
12% a year
Calculate the PI for each of the three projects.
Calculate the NPV for each of the three projects.
If the projects were independent, and according to the PI rule,
which project(s) would you...
There are three methods of evaluating capital projects that are commonly utilized. What are these methods?...
There are three methods of evaluating capital projects that are
commonly utilized. What are these methods? Do they all depend on
time value methods?
Which of the following has the highest Present Value? Select one: a. $1,200/yr. for 10 years...
Which of the following has the highest Present Value? Select
one: a. $1,200/yr. for 10 years discounted at 10%. b. $1,200/yr.
for 10 years discounted at 8%. c. $1,000/yr. for 10 years
discounted at 10%. d. $1,000/yr. for 10 years discounted at 8%. e.
$1,200/yr. for 12 years discounted at 8%.
An appropriate discount rate to value projects in an unlevered company is Select one: a. The...
An appropriate discount rate to value projects in an unlevered
company is
Select one:
a. The cost of debt
b. The weighted average cost of capital
c. The risk free rate of interest
d. The cost of equity
You will be evaluating three projects for Hasbro Toys. Hasbro's cost of capital or discount rate...
You will be evaluating three projects for Hasbro Toys. Hasbro's
cost of capital or discount rate is 9%.
The first project (A) will cost $100,000 initially. The project
will then return cash flows of $35,000 for 4 years.
The second project (B) will cost $75,000 initially. The project
will then return cash flows of $65,000 in year 1, $10,000 in year
2, and $5,000 in year 3.
The third project (C) will cost $70,000 initially. The project
will then return...
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