I nedd an answer based qusetions on the image. Thank You. NPV, with rankings Botany Bay, Inc., a maker of casual clothing, is consideringfour projects. Because of past financial difficulties, the company has a high cost ofcapital at 15%.Project AS50,000Project BProject CProject DS180,000Initial investment (CFo)S100,000s80,000Cash inflows (CF;)$35,000Year (t)$20,000$20,000$100,00020,00050,00040,00080,00020,00050,00060,00060,000a. Calculate the NPV of each project, using a cost of capital of 15%.b. Rank acceptable projects by NPV.c. Calculate the IRR of each project, and use it to determine the highest cost of cap-ital at which all the projects would be acceptable.d. If Project A, B, C, D are independent projects, which project(s)will you propose to beimplemented? If Project A, B, C, D are mutually exclusive projects, which project will you proposeto be implemented.

Net Present Value: It is the current worth of the project's annual cash flows and the initial cost…

a. Calculate the NPV of each project, using a cost of capital of 15%. b. Rank acceptable projects by NPV. c. Calculate the IRR of each project, and use it to determine the highest cost of cap- ital at which all the projects would be acceptable.

a. Calculate the NPV of each project, using a cost of capital of 15%. b. Rank acceptable projects by NPV. c. Calculate the IRR of each project, and use it to determine the highest cost of cap- ital at which all the projects would be acceptable.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter13: Capital Budgeting: Estimating Cash Flows And Analyzing Risk

Section: Chapter Questions

Problem 2P

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Question

I nedd an answer based qusetions on the image. Thank You.

NPV, with rankings Botany Bay, Inc., a maker of casual clothing, is considering
four projects. Because of past financial difficulties, the company has a high cost of
capital at 15%.
Project A
S50,000
Project B
Project C
Project D
S180,000
Initial investment (CFo)
S100,000
s80,000
Cash inflows (CF;)
$35,000
Year (t)
$20,000
$20,000
$100,000
20,000
50,000
40,000
80,000
20,000
50,000
60,000
60,000
a. Calculate the NPV of each project, using a cost of capital of 15%.
b. Rank acceptable projects by NPV.
c. Calculate the IRR of each project, and use it to determine the highest cost of cap-
ital at which all the projects would be acceptable.
d. If Project A, B, C, D are independent projects, which project(s)will you propose to be
implemented? If Project A, B, C, D are mutually exclusive projects, which project will you propose
to be implemented.

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