[4] Each of three mutually exclusive projects costs $200. Using the table provided, rank the projects in descending NPV order. Present Value Projects’ Cash Flow А В С Interest Factor Year (10%) 1 .91 $300 $200 $ 0 2 .83 200 100 100 3 .75 100 100 4 .68 100 200 .62 200 300

[4] Each of three mutually exclusive projects costs $200. Using the table provided, rank the projects in descending NPV order. Present Value Projects’ Cash Flow А В С Interest Factor Year (10%) 1 .91 $300 $200 $ 0 2 .83 200 100 100 3 .75 100 100 4 .68 100 200 .62 200 300

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

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

[4] Each of three mutually exclusive projects costs $200. Using the table provided, rank the
projects in descending NPV order.
Present Value
Projects’ Cash Flow
А В С
Interest Factor
Year
(10%)
1
.91
$300 $200 $ 0
2
.83
200
100
100
3
.75
100
100
4
.68
100
200
5
.62
200
300

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Consider the following projects: Cash Flows ($) Co -10,000 -20,000 Project D E Assume that the projects are mutually exclusive and that the opportunity cost of capital is 10%. a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project D E Profitability Index C1 20,000 35,000 b-1. Calculate the profitability-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Profitability-index
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