In: Finance
Consider the following two mutually exclusive projects: |
Year | Cash Flow (A) | Cash Flow (B) |
0 | –$194,073 | –$16,205 |
1 | 25,900 | 5,662 |
2 | 53,000 | 8,227 |
3 | 58,000 | 13,595 |
4 | 406,000 | 9,462 |
Whichever project you choose, if any, you require a 6 percent return on your investment. |
Required: |
(a) | What is the payback period for Project A? |
(Click to select)2.98 years3.3 years3.14 years3.05 years3.24 years |
(b) | What is the payback period for Project B? |
(Click to select)2.28 years2.17 years2.06 years2.24 years2.11 years |
(c) | What is the discounted payback period for Project A? |
(Click to select)3.39 years3.33 years3.07 years3.23 years3.13 years |
(d) | What is the discounted payback period for Project B? |
(Click to select)2.24 years2.31 years2.43 years2.38 years2.19 years |
(e) | What is the NPV for Project A? |
(Click to select)$240,384.16$260,209.66$255,253.28$247,818.72$235,427.78 |
(f) | What is the NPV for Project B ? |
(Click to select)$14,599.53$14,906.89$16,136.32$15,367.92$15,828.96 |
(g) | What is the IRR for Project A? |
(Click to select)36.75%33.95%35%33.25%36.05% |
(h) | What is the IRR for Project B? |
(Click to select)36.86%39.9%36.1%39.14%38% |
(i) | What is the profitability index for Project A? |
(Click to select)2.2092.3912.3452.2772.163 |
(j) | What is the profitability index for Project B? |