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 1 year 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: 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...
Jefferson International is trying to choose between the following two mutually exclusive design projects. The required...
Jefferson International is trying to choose between the
following two mutually exclusive design projects. The required
return is 12 percent. If the company applies the internal rate of
return (IRR) decision rule, which project should the firm accept?
If the company applies the NPV decision rule, which project should
it take? Given your first two answers, which project should the
firm actually accept?
Year
Project A
Project B
0
-$75,000
-$38,000
1
$32,400
$17,800
2
$30,200
$14,200
3
$36,600
$19,800
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