Question

Pound Industries is attempting to select the best of three mutually exclusive projects. The initial investment and​ after-tax cash inflows associated with these projects are shown in the following table.

Cash flows		Project A		Project B		Project C
Initial investment​ (CF)		​ $140,000		$170,000		$170,000
Cash Flows (CF) T= 1 to 15	​	$45,000                       $56,500                                        57,000

a. Calculate the payback period for each project.

b. Calculate the net present value​ (NPV) of each​ project, assuming that the firm has a cost of capital equal to 8%.

c. Calculate the internal rate of return​ (IRR) for each project.

d. Indicate which project you would recommend.

a.The payback period of project A is .............years.  

The payback period of project B is.............years.  ​

The payback period of project C is...........years.  ​

b The NPV of project A is ​$ ____________.

c. The NPV of project B is ​$__________.

d. The NPV of project C is ​$___________.

e. The IRR (Internal rate of return) for project a,b,c.

f. Indicate which project you would recommend.

Answer 1

I AM CORRECT THAT FOR PROJECT B, CASH FLOW IS 56500 AND FOR PROJECT C, IT IS 57000. THEY ARE NOT PROPERLY ARRANGED. OTHERWISE CORRECT ME. WILL CHANGE ANSWER ACCORDINGLY

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

As nothing was mentioned excel is used.