Question
In: Finance
Cori's Sausage Corporation is trying to choose between the following two mutually exclusive design projects: ...
|
Cori's Sausage Corporation is trying to choose between the following two mutually exclusive design projects: |
| Year | Cash Flow (I) | Cash Flow (II) | |||||
| 0 | –$ | 65,000 | –$ | 39,800 | |||
| 1 | 29,200 | 18,000 | |||||
| 2 | 29,200 | 18,000 | |||||
| 3 | 29,200 | 18,000 | |||||
| a-1. |
If the required return is 12 percent, what is the profitability index for each project?(Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) |
Solutions
Expert Solution
| Particulars | Year | PVF @ 12% | Cash flow project A | PV Project A | Cash flow project B | PV Project B |
| Cash Outflow | 0 | 1.00 | -65000 | (65,000) | (39,800) | (39,800) |
| Cash Inflow | 1 | 0.89 | 29200 | 26,071 | 18,000 | 16,071 |
| Cash Inflow | 2 | 0.80 | 29200 | 23,278 | 18,000 | 14,349 |
| Cash Inflow | 3 | 0.71 | 29200 | 20,784 | 18,000 | 12,812 |
| NPV | 5,133 | 3,433 | ||||
| Profiability Index | 1.08 | 1.09 |
jeff jeffy answered 2 years agoRelated Solutions
Cori's Sausage Corporation is trying to choose between the following two mutually exclusive design projects: ...
Cori's Sausage Corporation is trying to choose between the
following two mutually exclusive design projects:
Year
Cash Flow (I)
Cash Flow (II)
0
–$
50,000
–$
24,800
1
24,700
13,200
2
24,700
13,200
3
24,700
13,200
a-1.
If the required return is 11 percent, what is the profitability
index for each project? (Do not round intermediate
calculations and round your answers to 3 decimal places, e.g.,
32.161.)
Cori's Sausage Corporation is trying to choose between the following two mutually exclusive design projects: ...
Cori's Sausage Corporation is trying to choose between the
following two mutually exclusive design projects:
Year
Cash Flow (I)
Cash Flow (II)
0
–$
62,000
–$
36,800
1
28,300
16,800
2
28,300
16,800
3
28,300
16,800
a-1.
If the required return is 11 percent, what is the profitability
index for each project? (Do not round intermediate
calculations and round your answers to 3 decimal places, e.g.,
32.161.)
a-2.
If the company applies the profitability index decision rule,...
Cori's Sausage Corporation is trying to choose between the following two mutually exclusive design projects: ...
Cori's Sausage Corporation is trying to choose between the
following two mutually exclusive design projects:
Year
Cash Flow (I)
Cash Flow (II)
0
–$
60,000
–$
34,800
1
27,700
16,200
2
27,700
16,200
3
27,700
16,200
a-1.
If the required return is 12 percent, what is the profitability
index for each project? (Do not round intermediate
calculations and round your answers to 3 decimal places, e.g.,
32.161.)
a-2.
If the company applies the profitability index decision rule,...
Cori's Sausage Corporation is trying to choose between the following two mutually exclusive design projects: ...
Cori's Sausage Corporation is trying to choose between the
following two mutually exclusive design projects:
Year
Cash Flow (I)
Cash Flow (II)
0
–$
59,000
–$
33,800
1
27,400
15,900
2
27,400
15,900
3
27,400
15,900
a-1.
If the required return is 11 percent, what is the profitability
index for each project?(Do not round intermediate
calculations and round your answers to 3 decimal places, e.g.,
32.161.)
a-2.
If the company applies the profitability index decision rule,
which...
Cori's Sausage Corporation is trying to choose between the following two mutually exclusive design projects: ...
Cori's Sausage Corporation is trying to choose between the
following two mutually exclusive design projects:
Year
Cash Flow (I)
Cash Flow (II)
0
–$
74,000
–$
17,000
1
21,900
9,200
2
21,900
9,200
3
21,950
9,200
a-1.
If the required return is 12 percent, what is the profitability
index for each project? (Do not round intermediate
calculations and round your answers to 3 decimal places, e.g.,
32.161.)
Profitability Index
Project I
Project II
a-2....
Cori's Sausage Corporation is trying to choose between the following two mutually exclusive design projects: Year...
Cori's Sausage Corporation is trying to choose between the
following two mutually exclusive design projects:
Year
Cash Flow (I)
Cash Flow (II)
0
–$
47,000
–$
21,800
1
23,800
12,300
2
23,800
12,300
3
23,800
12,300
a-1.
If the required return is 11 percent, what is the profitability
index for each project? (Do not round intermediate
calculations and round your answers to 3 decimal places, e.g.,
32.161.)
a-2.
If the company applies the profitability index decision rule,
which project should...
Cori's Sausage Corporation is trying to choose between the following two mutually exclusive design projects: Year...
Cori's Sausage Corporation is trying to choose between the
following two mutually exclusive design projects: Year Cash Flow
(I) Cash Flow (II) 0 –$ 62,000 –$ 36,800 1 28,300 16,800 2 28,300
16,800 3 28,300 16,800 a-1. If the required return is 11 percent,
what is the profitability index for each project? (Do not round
intermediate calculations and round your answers to 3 decimal
places, e.g., 32.161.) a-2. If the company applies the
profitability index decision rule, which project should...
Cori’s sausage corp is trying to choose between the following two mutually exclusive design projects: Year...
Cori’s sausage corp is trying to choose between the following
two mutually exclusive design projects: Year cashflow (1) cashflow
(2) 0 -55,000 -29800 1 26200 14700 2 26200 14700 3 26200 14700 a-1.
If the required return is 10% what is the profitability for each
project? (round your answers to three decimal places) a-2. if the
company applies the profitability index decision rule, which
project should the firm accept? 1 or 2. b-1. What is the NPV for
each project?...
The Sloan Corporation is trying to choose between the following two mutually exclusive design projects: ...
The Sloan Corporation is trying to choose between the following
two mutually exclusive design projects:
Year
Cash Flow
(I)
Cash Flow
(II)
0
–$
61,000
–$
18,300
1
28,100
9,950
2
28,100
9,950
3
28,100
9,950
a-1
If the required return is 10 percent, what is the profitability
index for both projects? (Do not round intermediate
calculations. Round your answers to 3 decimal places, e.g.,
32.161.)
Profitability
Index
Project I
Project II
a-2
If...
The Sloan Corporation is trying to choose between the following two mutually exclusive design projects: Year...
The Sloan Corporation is trying to choose between the following
two mutually exclusive design projects:
Year
Cash Flow (I)
Cash Flow (II)
0
–$
63,000
–$
15,500
1
28,900
7,900
2
28,900
7,900
3
28,900
7,900
a-1.
If the required return
is 10 percent, what is the profitability index for both projects?
(Do not round intermediate calculations and round your
answers to 3 decimal places, e.g., 32.161.)
a-2.
If the company applies
the profitability index decision rule, which project should...
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