Question
In: Finance
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0...
| Consider the following two mutually exclusive projects: |
| Year | Cash Flow (A) | Cash Flow (B) |
| 0 | –$201,178 | –$15,104 |
| 1 | 25,700 | 4,731 |
| 2 | 55,000 | 8,951 |
| 3 | 56,000 | 13,135 |
| 4 | 413,000 | 8,126 |
| Whichever project you choose, if any, you require a 6 percent return on your investment. |
| a. What is the payback period for Project A? |
| b. What is the payback period for Project B? |
| c. What is the discounted payback period for Project A? |
| d. What is the discounted payback period for Project B? |
| e. What is the NPV for Project A? |
| f. What is the NPV for Project B ? |
| g. What is the IRR for Project A? |
| h. What is the IRR for Project B? |
| i. What is the profitability index for Project A? |
| j. What is the profitability index for Project B? |
Solutions
Expert Solution
| Answers | |
| a. What is the payback period for Project A? | 3.16 |
| b. What is the payback period for Project B? | 2.11 |
| c. What is the discounted payback period for Project A? | 3.25 |
| d. What is the discounted payback period for Project B? | 2.24 |
| e. What is the NPV for Project A? | 2,46,170.45 |
| f. What is the NPV for Project B ? | 14,790.52 |
| g. What is the IRR for Project A? | 34.00% |
| h. What is the IRR for Project B? | 39.00% |
| i. What is the profitability index for Project A? | 1.22 |
| j. What is the profitability index for Project B? | 0.98 |
jeff jeffy answered 2 years agoRelated Solutions
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Consider the following two mutually exclusive
projects:
Year
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364,000
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Whichever project you choose, if any, you require a return of 11
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(Do not round intermediate calculations and round your
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Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0...
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Whichever project you choose, if any, you require a 14 percent
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What is the payback period for each project? (Do not
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Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0...
Consider the following two mutually exclusive projects:
Year
Cash Flow (A)
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–$260,730
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27,800
4,942
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56,000
8,023
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13,040
4
426,000
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Whichever project you choose, if any, you require a 6 percent
return on your investment.
a. What is the payback period for Project
A?
b. What is the payback period for Project
B?
c. What is the discounted...
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0...
Consider the following two
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Year
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1
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2
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8,358
3
50,000
13,472
4
385,000
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Whichever project you choose, if
any, you require a 6 percent return on your investment.
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b.What
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Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0...
Consider the following two
mutually exclusive projects:
Year
Cash Flow
(A)
Cash Flow
(B)
0
–$251,835
–$15,247
1
25,100
4,828
2
55,000
8,358
3
50,000
13,472
4
385,000
8,102
Whichever project you choose, if
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b.What
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13,423
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–$
345,000
–$
48,500
1
50,000
24,500
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70,000
22,500
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70,000
20,000
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445,000
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Whichever project you choose, if
any, you require a 14 percent return on your investment.
a-1
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
Project A
years
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–$
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74,000
1
78,000
32,000
2
98,000
30,000
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73,000
27,500
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448,000
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Whichever project you choose, if any, you require a 15% return
on your investment.
a-1. What is the payback period for each
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years
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a-2. If you apply the payback criterion, which
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32,000
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29,500
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on your investment.
a-1. What is the payback period for each
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