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(Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Initial investment (CFO) Year (1) 12345 Project A $140,000 Project B $69,000 Cash inflows (CF,) $15,000 $25,000 $50,000 $45,000 $70,000 $40,000 $25,000 $25,000 $5,000 $15,000

(Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Initial investment (CFO) Year (1) 12345 Project A $140,000 Project B $69,000 Cash inflows (CF,) $15,000 $25,000 $50,000 $45,000 $70,000 $40,000 $25,000 $25,000 $5,000 $15,000

Essentials Of Investments
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
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Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Initial investment (CFO) Year (1) 12345 Print Project A $140,000 Cash inflows (CF₂) $15,000 $25,000 $50,000 $45,000 $70,000 Project B $69,000 Done $40,000 $25,000 $25,000 $5,000 $15,000 - X
Transcribed Image Text:Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Initial investment (CFO) Year (1) 12345 Print Project A $140,000 Cash inflows (CF₂) $15,000 $25,000 $50,000 $45,000 $70,000 Project B $69,000 Done $40,000 $25,000 $25,000 $5,000 $15,000 - X
NPV and IRR analysis of projects Thomas Company is considering two mutually exclusive projects. The firm, which has a cost of capital of 9%, has estimated its cash flows as shown in the following table: a. Calculate the NPV of each project, and assess its acceptability. b. Calculate the IRR for each project, and assess its acceptability. a. The NPV of project A is $. (Round to the nearest cent.) According to the NPV method, is project A acceptable? (Select the best answer below.) O No OYes The NPV of project B is $ (Round to the nearest cent.) Is project B acceptable on the basis of NPV? (Select the best answer below.) O Yes O No b. The IRR of project A is%. (Round to two decimal places.) Is project A acceptable on the basis of IRR? (Select the best answer below.) O No
Transcribed Image Text:NPV and IRR analysis of projects Thomas Company is considering two mutually exclusive projects. The firm, which has a cost of capital of 9%, has estimated its cash flows as shown in the following table: a. Calculate the NPV of each project, and assess its acceptability. b. Calculate the IRR for each project, and assess its acceptability. a. The NPV of project A is $. (Round to the nearest cent.) According to the NPV method, is project A acceptable? (Select the best answer below.) O No OYes The NPV of project B is $ (Round to the nearest cent.) Is project B acceptable on the basis of NPV? (Select the best answer below.) O Yes O No b. The IRR of project A is%. (Round to two decimal places.) Is project A acceptable on the basis of IRR? (Select the best answer below.) O No
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