In: Finance
Capital Budgeting Methods Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,500 per year for 5 years. Project L costs $25,000 and is expected to produce cash flows of $8,000 per year for 5 years. Calculate the two projects' NPVs, assuming a cost of capital of 14%. Do not round intermediate calculations. Round your answers to the nearest cent. Project S: $ Project L: $ Which project would be selected, assuming they are mutually exclusive? Based on the NPV values, -Select-Project SProject LItem 3 would be selected. Calculate the two projects' IRRs. Do not round intermediate calculations. Round your answers to two decimal places.Project S: % Project L: % Which project would be selected, assuming they are mutually exclusive? Based on the IRR values, -Select-Project SProject LItem 6 would be selected. Calculate the two projects' MIRRs, assuming a cost of capital of 14%. Do not round intermediate calculations. Round your answers to two decimal places. Project S: % Project L: % Which project would be selected, assuming they are mutually exclusive? Based on the MIRR values, -Select-Project SProject LItem 9 would be selected. Calculate the two projects' PIs, assuming a cost of capital of 14%. Do not round intermediate calculations. Round your answers to three decimal places.Project S: Project L: Which project would be selected, assuming they are mutually exclusive? Based on the PI values, -Select-Project SProject LItem 12 would be selected. Which project should actually be selected? -Select-Project SProject LItem 13 should actually be selected. |