Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 9%. 0 1 2 3 4 Project A -920 650 395 230 280 Project B -920 250 330 380 730 What is Project A's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. $ What is Project B's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. $ If the projects were independent, which project(s) would be accepted? -Select-NeitherProject AProject BBoth projects A and BCorrect 1 of Item 3 If the projects were mutually exclusive, which project(s) would be accepted? -Select-Neither Project AProject BBoth projects A and B
Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 9%. 0 1 2 3 4 Project A -920 650 395 230 280 Project B -920 250 330 380 730 What is Project A's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. $ What is Project B's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. $ If the projects were independent, which project(s) would be accepted? -Select-NeitherProject AProject BBoth projects A and BCorrect 1 of Item 3 If the projects were mutually exclusive, which project(s) would be accepted? -Select-Neither Project AProject BBoth projects A and B
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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Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation , salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 9%.
| 0 | 1 | 2 | 3 | 4 | ||||||
| Project A | -920 | 650 | 395 | 230 | 280 | |||||
| Project B | -920 | 250 | 330 | 380 | 730 |
What is Project A's
$
What is Project B's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.
$
If the projects were independent, which project(s) would be accepted?
-Select-NeitherProject AProject BBoth projects A and BCorrect 1 of Item 3
If the projects were mutually exclusive, which project(s) would be accepted?
-Select-Neither Project AProject BBoth projects A and B
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