11. Problem 11.10 (Capital Budgeting Criteria: Mutually Exclusive Projects) еВook A firm with a WACC of 10% is considering the following mutually exclusive projects: 1 3 4 Project 1 -$200 $50 $50 $50 $205 $205 Project 2 -$400 $350 $350 $150 $150 $150 Which project would you recommend? Select the correct answer. Oa. Project 1, since the NPV1 > NPV2. Ob. Both Projects 1 and 2, since both projects have NPV's > 0. Oc. Both Projects 1 and 2, since both projects have IRR's > 0. Od. Neither Project 1 nor 2, since each project's NPV < 0. Oe. Project 2, since the NPV2 > NPV1.

11. Problem 11.10 (Capital Budgeting Criteria: Mutually Exclusive Projects) еВook A firm with a WACC of 10% is considering the following mutually exclusive projects: 1 3 4 Project 1 -$200 $50 $50 $50 $205 $205 Project 2 -$400 $350 $350 $150 $150 $150 Which project would you recommend? Select the correct answer. Oa. Project 1, since the NPV1 > NPV2. Ob. Both Projects 1 and 2, since both projects have NPV's > 0. Oc. Both Projects 1 and 2, since both projects have IRR's > 0. Od. Neither Project 1 nor 2, since each project's NPV < 0. Oe. Project 2, since the NPV2 > NPV1.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

8. NPV profiles An NPV profile plots a project's NPV at various costs of capital. An example NPV profile is shown below: Identify the range of costs of capital that a firm would use to accept and reject this project, and answer the questions that follow. NPV (Dollars) 600 500 400 300 200 100 0 ← -100 -200 -300 A 2 4 6 8 10 12 14 16 DISCOUNT (REQUIRED) RATE (Percent) The project represented by triangle A should be B 18 20 This NPV profile demonstrates that as the cost of capital increases, the project's NPV ?
Details WACC 0 SGWN-O 1 2 3 4 5 6 7.80% Project A Project B -1225 395 402 423 432 489 512 -2146 592.5 603 634.5 648 733.5 768 1. Construct NPV profile table by using cashflows from Project A and B above. 2. Draw NPV profile 3. Compute crossover rate To receive EC your work has to be done in Excel.
Problem 7: NPV versus IRR. Consider the following two mutually exclusive projects: Year Cash flow Cash flow (X) (Y) O 1 2 3 -9500 5800 4000 4000 PART 7A: The NPV for X is $ Answer: 2083.77 -9500 3500 5000 6000 if the required rate of return is 10%.
3. A. B. C. time Capital Budgeting Project S Project L D. 0 -1000 -1000 1 500 100 2 400 200 3 300 300 4 200 400 5 100 500 USE NPV METHOD, assuming the WACC is 10%. Which project will you invest? Use IRR method, which project will you invest? Assuming WACC is 10%, use MIRR, which project will you invest? Use payback period method, which project will you invest?
Consider the following projects: Project Co C₁ Cash Flows ($) C2 C3 CA C5 A -1,300 1,300 0 0 0 0 B -2,600 1,300 1,300 4,300 1,300 1,300 C -3,250 1,300 1,100 0 1,300 1,300 a. If the opportunity cost of capital is 9%, which project(s) have a positive NPV? b. Calculate the payback period for each project. c. Which project(s) would a firm using the payback rule accept if the cutoff period is three years? Complete this question by entering your answers in the tabs below. Required A Required B Required C If the opportunity cost of capital is 9%, which project(s) have a positive NPV? Note: Do not round intermediate calculations. Positive NPV project(s) Projects B and C Required A Required B
klp.2
please give me answer dont give answer in image format
Problem 8-23 Profitability Index (LO3) Consider the following projects: Co C₁ -$ 2,450 +$ 2,350 -2,450 +1,790 Project A B a. Calculate the profitability index for A and B assuming a 23% opportunity cost of capital. Note: Do not round intermediate calculations. Round your answers to 4 decimal places. Project A B C₂ +$ 1,550 +1,798 Profitability index ооо b. According to the profitability index rule, which project(s) should you accept? Project A Project B Both ONeither
Table 1: Project Data Project NPV (M$) Risk (%) Capital (M$) A 19 4 14 B 22 S 10 C 24 6 12 D 27 7 15 E 21 5 13 The budget constraint may be stated as: *A+c+2%p <= 0 14% +10x12x15xD -13%E43 14% -10%E-12x15xD -13%E43 %B5%E
can u make the npv, using this format 1 2 3 4 5 Net income 5,175,140.21 5,448,761.67 5,709,496.33 7,789,606.88 6,251,091.31 PV 12%
12q-19
12q-20

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS