Question
In: Finance
Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the...
Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the discount rate for both projects is 9 percent.
YearDry PrepregSolvent Prepreg
0–$1,850,000 –$825,000
1 1,115,000 450,000
2 930,000 750,000
3 765,000 420,000
a.
What is the payback period for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)
b.
What is the NPV for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)
c.
What is the IRR for both projects? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
d.
Calculate the incremental IRR for the cash flows. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the...
Consider the following cash flows of two mutually exclusive
projects for Tokyo Rubber Company. Assume the discount rate for
both projects is 12 percent.
Year
Dry Prepreg
Solvent Prepreg
0
–$
1,800,000
–$
800,000
1
1,110,000
425,000
2
920,000
700,000
3
760,000
410,000
a.
What is the payback period for both projects? (Do not
round intermediate calculations. Round your answers to 2 decimal
places, e.g., 32.16.)
b.
What is the NPV for both projects? (Do not round
intermediate...
Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the...
Consider the following cash flows of two mutually exclusive
projects for Tokyo Rubber Company. Assume the discount rate for
both projects is 8 percent.
Year
Dry Prepreg
Solvent Prepreg
0
–$
1,810,000
–$
805,000
1
1,111,000
430,000
2
922,000
710,000
3
761,000
412,000
a.
What is the payback period for both projects? (Do not
round intermediate calculations. Round your answers to 2 decimal
places, e.g., 32.16.)
Payback
period
Dry Prepeg
years
Solvent Prepeg
years
b.
What is...
Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the...
Consider the following cash flows of two mutually exclusive
projects for Tokyo Rubber Company. Assume the discount rate for
both projects is 10 percent.
Year
Dry Prepreg
Solvent Prepreg
0
–$
1,830,000
–$
815,000
1
1,113,000
440,000
2
926,000
730,000
3
763,000
416,000
a.
What is the payback period for both projects? (Do not
round intermediate calculations. Round your answers to 2 decimal
places, e.g., 32.16.)
b.
What is the NPV for both projects? (Do not round
intermediate...
Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the...
Consider the following cash flows of two mutually exclusive
projects for Tokyo Rubber Company. Assume the discount rate for
both projects is 7 percent.
Year
Dry Prepreg
Solvent Prepreg
0
–$
1,870,000
–$
835,000
1
1,117,000
460,000
2
934,000
770,000
3
767,000
424,000
a.
What is the payback period for both projects? (Do not
round intermediate calculations. Round your answers to 2 decimal
places, e.g., 32.16.)
b.
What is the NPV for both projects? (Do not round
intermediate calculations....
Comparing Investment Criteria. Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber...
Comparing Investment Criteria. Consider the following cash flows
of two mutually exclusive projects for Tokyo Rubber Company. Assume
the discount rate for both projects is 8%
Year
Deepwater
Fishing
New Submarine Ride
0
-$1,700,000
-$750,000
1
1,100,000
375,000
2
900,000
600,000
3
750,000
390,000
b) Based on the NPV, which project should be taken?
c) Based on IRR, which project should be taken?
Consider the following cash flows of two mutually exclusive projects for Spartan Rubber Company. Assume the...
Consider the following cash flows of two mutually exclusive
projects for Spartan Rubber Company. Assume the discount rate for
both projects is 7 percent.
Year
Dry Prepreg
Solvent Prepreg
0
–$
1,890,000
–$
900,000
1
1,119,000
470,000
2
938,000
790,000
3
769,000
428,000
a. What is 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
Dry Prepreg
years
Solvent Prepreg
years
b. What is the NPV...
Consider the following cash flows of two mutually exclusive projects for Spartan Rubber Company. Assume the...
Consider the following cash flows of two mutually exclusive
projects for Spartan Rubber Company. Assume the discount rate for
both projects is 8 percent.
Year
Dry Prepreg
Solvent Prepreg
0
–$
1,810,000
–$
805,000
1
1,111,000
430,000
2
922,000
710,000
3
761,000
412,000
a. What is 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
Dry Prepreg
1.92 1.92
Incorrect years
Solvent Prepreg
2.20 2.20
Incorrect...
Consider the following cash flows of two mutually exclusive projects for Braisl Rubber Co. Assume the...
Consider the following cash flows of two mutually exclusive
projects for Braisl Rubber Co. Assume the discount rate for both
projects is 9 Percent.
Year
Dry PrePreg
Solvent PrePreg
0
1,820,000
810,000
1
1,112,000
435,000
2
924,000
720,000
3
762,000
414,000
a. What is the payback period for both
projects?
Dry PrePreg
Years
Solvent PrePreg
Years
b. What is the NPV for both projects?
Dry PrePreg
Solvent PrePreg
c. What is the IRR for both projects?
Dry PrePreg
%
Solvent...
Comparing Investment Criteria. Consider the following cash flows of two mutually exclusive projects for Spartan Rubber...
Comparing Investment Criteria. Consider the following cash flows
of two mutually exclusive projects for Spartan Rubber
company. Assume the discount rate for both projects is
10 percent.
a. Based on the payback period, which project should be
taken?
b. Based onthe NPV, which project should be taken?
c. Based on the IRR, which project should be
taken?
d. Based on the above analysis, is incremental IRR
analysis necessary? If yes, please conduct the
analysis.
Year
Dry Prepreg
Solvent Prepreg
0
(1,800,000)
(925,000)
1
690,000...
Consider the following two mutually exclusive projects and their Cash Flows ($)
Consider the following two mutually exclusive projects and their
Cash Flows ($)Project
C0 C1 C2
C3K
–$100
+$45 +$45 +$60 W
–$150
+$45 +$45 +$125Which statement is correct based on the above information about
Projects K and W?a. If the discount rate is 7.5%, accept project W because the
cross-over rate is 9%b. Accept project K, because at a 9% discount rate K and W have
the same net present value.c. If the discount rate is 9.5%, reject project K, because the...
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