In: Finance
Tri Star, Inc., has the following mutually exclusive
projects:
| Year | Project A | Project B | |||||
| 0 | –$ | 13,800 | –$ | 9,200 | |||
| 1 | 8,400 | 3,900 | |||||
| 2 | 7,000 | 3,400 | |||||
| 3 | 2,100 | 5,800 | |||||
Calculate the payback period for each project. (Do not
round intermediate calculations and round your answers to 2 decimal
places, e.g., 32.16.)
| Payback Period | |
| Project A | years |
| Project B | years |
Based on the payback period, which project should the company
accept?
Project B
Project A
If the appropriate discount rate is 10 percent, what is the NPV
for each project? (Do not round intermediate calculations
and round your answers to 2 decimal places, e.g.,
32.16.)
| NPV | |
| Project A | $ |
| Project B | $ |
Based on the NPV, which project should the company
accept?
Project A
Project B