Problem 10-10 Capital Budgeting Methods Project S has a cost of $11,000 and is expected to...

Problem 10-10
Capital Budgeting Methods

Project S has a cost of $11,000 and is expected to produce benefits (cash flows) of $3,400 per year for 5 years. Project L costs $23,000 and is expected to produce cash flows of $6,900 per year for 5 years.

Calculate the two projects' NPVs, assuming a cost of capital of 14%. Round your answers to the nearest cent.

Project S $

Project L $

Which project would be selected, assuming they are mutually exclusive?
-Select-Project S or Project L
Calculate the two projects' IRRs. Round your answers to two decimal places.

Project S %

Project L %

Which project would be selected, assuming they are mutually exclusive?
-Select-Project S or Project LI
Calculate the two projects' MIRRs, assuming a cost of capital of 14%. Round your answers to two decimal places.

Project S %

Project L %

Which project would be selected, assuming they are mutually exclusive?
-Select-Project S or Project L
Calculate the two projects' PIs, assuming a cost of capital of 14%. Round your answers to two decimal places.

Project S

Project L

Which project would be selected, assuming they are mutually exclusive?
-Select- Project S or Project L
Which project should actually be selected?
-Select-Project S or Project L

Solutions

Expert Solution

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

jeff jeffy answered 8 months ago

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