Question

Problem 11-1
NPV

Project K costs $50,000, its expected cash inflows are $15,000 per year for 12 years, and its WACC is 9%. What is the project's NPV? Round your answer to the nearest cent.

$

Problem 11-2
IRR

Project K costs $51,525.47, its expected cash inflows are $11,000 per year for 10 years, and its WACC is 10%. What is the project's IRR? Round your answer to two decimal places.

%

Problem 11-3
payback period

Project K costs $65,000, its expected cash inflows are $8,000 per year for 9 years, and its WACC is 13%. What is the project’s payback? Round your answer to two decimal places.

years

Problem 11-13
net present value

A firm with a WACC of 10% is considering the following mutually exclusive projects:

0

1

2

3

4

5

Project A     -$450	$75	$75	$75	$225	$225
Project B     -$550	$200	$200	$55	$55	$55

Which project which you recommend?why?

Problem 11-4 net present value Project S costs $20,000 and its expected cash flows would be $5,500 per year for 5 years. Mutually exclusive Project L costs $39,000 and its expected cash flows would be $12,100 per year for 5 year. If both project have a WCC of 12%, which project would you recommend? Why?

Answer 1