Question

In: Finance

Use the following information to answer the next four questions. The cash flows for two mutually...

Use the following information to answer the next four questions.

The cash flows for two mutually exclusive projects are shown in the following table. Investors require a 16% rate of return for each project.

Year

Cash Flows: Project S (in millions)

Cash Flows: Project T (in millions)

0

-200

-200

1

-20

50

2

45

60

3

70

30

4

-10

-40

5

125

100

6

125

100

7

150

100

Find the profitability index for project S. Round intermediate steps and your final answer to four decimals.

QUESTION 14

Which project or projects would you take based on the profitability index?

A. S

B. T

C. S&T

D. None of the above

QUESTION 15

Find the crossover rate. Round your final answer to four decimals and enter it in decimal format (.XXXX)  

QUESTION 16

Find project T's MIRR. Round intermediate steps and your final answer to four decimals. Enter your answer in decimal format (ex: .XXXX).

Solutions

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jeff jeffy answered 2 years ago
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