Capital Budgeting Methods Project S has a cost of $11,000 and is expected to produce benefits (cash flows) of $3,400 per year for 5 years. Project L costs $23,000 and is expected to produce cash flows of $6,900 per year for 5 years. Calculate the two projects' NPVs, assuming a cost of capital of 14%. Do not round intermediate calculations. Round your answers to the nearest cent. Project S: $ Project L: $ Which project would be selected, assuming they are mutually exclusive? Based on the NPV values, Project S/Project L would be selected. Calculate the two projects' IRRs. Do not round intermediate calculations. Round your answers to two decimal places. Project S: % Project L: % Which project would be selected, assuming they are mutually exclusive? Based on the IRR values, Project S/Project L would be selected. Calculate the two projects' MIRRs, assuming a cost of capital of 14%. Do not round intermediate calculations. Round your answers to two decimal places. Project S: % Project L: % Which project would be selected, assuming they are mutually exclusive? Based on the MIRR values, -Select-Project S/Project L would be selected. Calculate the two projects' PIs, assuming a cost of capital of 14%. Do not round intermediate calculations. Round your answers to three decimal places. Project S: Project L: Which project would be selected, assuming they are mutually exclusive? Based on the NPV values, Project S/Project L would be selected. Which project should actually be selected? Project S/Project L should actually be selected.
Capital Budgeting Methods
Project S has a cost of $11,000 and is expected to produce benefits (cash flows) of $3,400 per year for 5 years. Project L costs $23,000 and is expected to produce cash flows of $6,900 per year for 5 years.
Calculate the two projects' NPVs, assuming a cost of capital of 14%. Do not round intermediate calculations. Round your answers to the nearest cent.
Project S: $
Project L: $
Which project would be selected, assuming they are mutually exclusive?
Based on the NPV values, Project S/Project L would be selected.
Calculate the two projects' IRRs. Do not round intermediate calculations. Round your answers to two decimal places.
Project S: %
Project L: %
Which project would be selected, assuming they are mutually exclusive?
Based on the
Calculate the two projects' MIRRs, assuming a cost of capital of 14%. Do not round intermediate calculations. Round your answers to two decimal places.
Project S: %
Project L: %
Which project would be selected, assuming they are mutually exclusive?
Based on the MIRR values, -Select-Project S/Project L would be selected.
Calculate the two projects' PIs, assuming a cost of capital of 14%. Do not round intermediate calculations. Round your answers to three decimal places.
Project S:
Project L:
Which project would be selected, assuming they are mutually exclusive?
Based on the NPV values, Project S/Project L would be selected.
Which project should actually be selected?
Project S/Project L should actually be selected.
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