Question
In: Finance
You have been assigned the task of evaluating two mutually exclusive projects with the following projected...
You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows:
YEAR PROJECT A CASH FLOW PROJECT B CASH
FLOW
0 ------------- -100,000 --------------- -100,000
1 --------------- 33,000 --------------- 0
2 --------------- 33,000 --------------- 0
3 --------------- 33,000 --------------- 0
4 --------------- 33,000 --------------- 0
5 --------------- 33,000 --------------- 210,000
If the appropriate discount rate on these projects is 12 percent, which would be chosen and why?
1. What is the NPV of project A?
____(round to the nearest cent.)
2. What is the NPV of project B?
____(round to the nearest cent.)
3. Which project would be chosen and why?
a. Choose A because its NPV is higher
b. Choose B because its NPV is higher
c. Choose both because they both have positive NPVS.
d. Cannot choose without comparing their IRRS
Solutions
jeff jeffy answered 1 year agoRelated Solutions
You have been assigned the task of evaluating two mutually exclusive projects with the following projected...
You have been assigned the task of evaluating two mutually
exclusive projects with the following projected cash flows:
Year
Project A
Cash Flow
Project B
Cash Flow
0
$(110,000)
$(110,000)
1
40,000
0
2
40,000
0
3
40,000
0
4
40,000
0
5
40,000
240,000
If the appropriate discount rate on these projects is 8
percent, which would be chosen and why?
The NPV of Project A is $_____.
The NPV of Project A is $_____.
Which would be chosen...
You have been assigned the task of evaluating two mutually exclusive projects with the following projected...
You have been assigned the task of evaluating two mutually
exclusive projects with the following projected cash flows:
YEAR PROJECT A CASH FLOW
PROJECT B CASH FLOW
0
-110,000
-110,000
1
30,000
0
2
30,000
0
3
30,000
0
4
30,000
0
5
30,000
210,000
If the appropriate discount rate on these projects is 9
percent, which would be chosen and why?
What is the NPV...
You have been assigned the task of evaluating two mutually exclusive projects with the following projected...
You have been assigned the task of evaluating two mutually
exclusive projects with the following projected cash flows:
Year
Project A
Cash Flow
Project B
Cash Flow
0
$(102,000)
$(102,000)
1
32,000
00
2
32,000
00
3
32,000
00
4
32,000
00
5
32,000
230, 000
If the appropriate discount rate on these projects is 88
percent, which would be chosen and why?
The NPV of Project A is
(Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive...
(Mutually exclusive projects and NPV) You have been assigned
the task of evaluating two mutually exclusive projects with the
following projected cash flows: If the appropriate discount rate
on these projects is 11 percent, which would be chosen and why?
What is the NPV of project A? $ nothing (Round to the nearest
cent.) What is the NPV of project B? $ (Round to the nearest
cent.) Which project would be chosen and why? (Select the best
choice.) A....
(Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive...
(Mutually exclusive projects and NPV)
You have been assigned the task of evaluating two mutually
exclusive projects with the following projected cash flows:
YEAR
PROJECT A
CASH FLOW
PROJECT B
CASH FLOW
0
−$110,000
−$110,000
1
30,000
0
2
30,000
0
3
30,000
0
4
30,000
0
5
30,000
220,000
(Click
on the icon located on the top-right corner of the data table
above in order to copy its contents into a
spreadsheet.)
If the appropriate discount rate on these...
(Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive...
(Mutually exclusive projects and NPV) You have been assigned
the task of evaluating two mutually exclusive projects with the
following projected cash flows:
YEAR PROJECT A CASH FLOW PROJECT B CASH
FLOW
0 -105,000 -105,000
1 40,000 0
2 40,000 0
3 40,000 0
4 40,000 0
5 40,000 240,000
If the appropriate discount rate on these projects is 8
percent, which would be chosen and why? What is the NPV of
project A? What is the NPV of project...
Two projects being considered by a firm are mutually exclusive and have the following projected cash...
Two projects being considered by a firm are mutually exclusive
and have the following projected cash flows:
Year
Project A
Project B
0
($100,000)
($100,000)
1
39,500
0
2
39,500
0
3
39,500
133,000
Based only on the information
given, which of the two projects would be preferred, and why?
Project A, because it has an even cash inflow stream.
Project B, because it has a higher IRR.
Indifferent, because the projects have equal IRRs.
Include both in the capital...
Two projects being considered by a firm are mutually exclusive and have the following projected cash...
Two projects being considered by a firm are mutually exclusive
and have the following projected cash flows: Project A Project B
Year Cash Flow Cash Flow
Proj A Project B
0 -$300,000 -$300,000
1 145,500 $150,000
2 145,500 -$ 40,000
3 145,500 $370,000
The firm’s cost of capital is 10 percent. Based only on
the information given,
What are the NPV for Project A and B? Which project do you
choose based on the NPV?
What are the payback periods...
You are evaluating two mutually exclusive projects. The cash flows for each are:
You are evaluating two mutually exclusive
projects. The cash flows for each are:
Project
A Project
B
Year
0 ($60,000) ($85,000)
Year
1 $20,000 $22,000
Year
2 $35,000 $25,000
Year
3 $20,000 $30,000
Year
4 $25,000 $25,000
Year
5 $15,000
Year
6 $10,000
Year
7 $10,000
Year
8 $10,000
Assume that, if needed, each project is repeatable with no
change in cash flows. Your cost of capital is 13%.
Using the replacement chain approach, which project would you
chose to...
Two mutually exclusive projects are being considered which have the following projected cash flows: &nbs
Two mutually exclusive projects are being considered which have
the following projected cash flows:
Year
Project
A
Project B
0
($50,000)
($50,000)
1
$15,625
$ 0
2
$16,000
$ 0
3
$15,000
$ 0
4
$16,000
$ 0
5
$15,500
$99,500
a. Calculate the NPV for each of these projects using a 10% rate
of return. Also, indicate which project should be chosen based on
the NPV...
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