calculations and round your answers to 2 decimal places, e.g., 32.16.) p. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) . What is the IRR for each project? (Do not round intermediate calculations and your answers as a percent rounded to 2 decimal places, e.g., 32.16.) d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) e. Based on your answers in (a) through (d), which project will you finally choose?
calculations and round your answers to 2 decimal places, e.g., 32.16.) p. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) . What is the IRR for each project? (Do not round intermediate calculations and your answers as a percent rounded to 2 decimal places, e.g., 32.16.) d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) e. Based on your answers in (a) through (d), which project will you finally choose?
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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Question
Transcribed Image Text:Consider the following two mutually exclusive projects:
Year
Cash Flow (A) Cash Flow (B)
-$425,000
44,000
62,000
79,000
540,000
-$40,000
20,400
13,300
18,600
15,400
2
4
The required return on these investments is 10 percent.
a. What is the payback period for each project? (Do not round intermediate
calculations and round your answers to 2 decimal places, e.g., 32.16.)
b. What is the NPV for each project? (Do not round intermediate calculations and
round your answers to 2 decimal places, e.g., 32.16.)
c. What is the IRR for each project? (Do not round intermediate calculations and enter
your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
d. What is the profitability index for each project? (Do not round intermediate
calculations and round your answers to 3 decimal places, e.g., 32.161.)
e. Based on your answers in (a) through (d), which project will you finally choose?
a. Project A
Project B
b. Project A
Project B
c. Project A
years
years
%
Project B
%
d. Project A
Project B
е.
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