Cash flows for two mutually exclusive projects are shown below: Year CFM CFN 0 -200 -200 1 85 60 2 85 85 3 85 110 Both projects have a cost of capital of 10%. a. Calculate the payback for both projects and confirm which project will be accepted. b. Calculate the discounted payback for both projects and confirm which project will be accepted. c. Calculate the NPV for both projects and confirm which project will be accepted.
Cash flows for two mutually exclusive projects are shown below: Year CFM CFN 0 -200 -200 1 85 60 2 85 85 3 85 110 Both projects have a cost of capital of 10%. a. Calculate the payback for both projects and confirm which project will be accepted. b. Calculate the discounted payback for both projects and confirm which project will be accepted. c. Calculate the NPV for both projects and confirm which project will be accepted.
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
Related questions
Question
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Cash flows for two mutually exclusive projects are shown below: |
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Year |
CFM |
CFN |
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0 |
-200 |
-200 |
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1 |
85 |
60 |
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2 |
85 |
85 |
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3 |
85 |
110 |
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Both projects have a cost of capital of 10%. |
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a. Calculate the payback for both projects and confirm which project will be accepted. |
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b. Calculate the discounted payback for both projects and confirm which project will be accepted. |
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c. Calculate the |
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d. Calculate the |
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e. Calculate the MIRR for both projects and confirm which project will be accepted. |
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