Consider the following two mutually exclusive projects: Year - 0 (A)-347,000 (B) 49,500 1-A) - 48,000 (B) - 24,300 2 - (A) - 68,000 (B) - 22,300 3 - (A) - 68,000 (B) - 19,800 4-(A) - 443,000 (B) -14,900. What is the payback period for each project? Round final answers to 2 decimal places. What is the discounted payback period for each project? What is the NPV for each project? What is the IRR for each project? What is the profitability index for each project?

Consider the following two mutually exclusive projects: Year - 0 (A)-347,000 (B) 49,500 1-A) - 48,000 (B) - 24,300 2 - (A) - 68,000 (B) - 22,300 3 - (A) - 68,000 (B) - 19,800 4-(A) - 443,000 (B) -14,900. What is the payback period for each project? Round final answers to 2 decimal places. What is the discounted payback period for each project? What is the NPV for each project? What is the IRR for each project? What is the profitability index for each project?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 11MC: In an unrelated analysis, you have the opportunity to choose between the following two mutually...

See similar textbooks

Similar questions

What is the “cross-over” rate of the following projects? Year Project A Project B 0 -1,400 -800 1 950 600 2 950 600
When evaluating the following project, if the required return is 10 percent, what is its NPV? Year Project A ($1,200) 1 125 2. 250 3. 400 4 1000 O $100.57 $98.32 $103.79 O $99.22
A project has annual cash flows of €-45,000, €35,700, €15,700 and €5,700. Required: What is the payback period for this project? (Round your answer to 2 decimal places (e.g.. 32.16).) Payback period years
Here are the expected cash flows for three projects: Project Cash Flows (dollars) Year 0 Year 1 Year 2 Year 3 Year 4 A-7,000 +1,500 +1,500 +4,000 0B -3,000 0+3,000+3,000 +4,000 C-7,000+1,500 +1,500 +4,000 + 6,000 a. What is the payback period on each of the projects? b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? c. If you use a cutoff period of 3 years, which projects will you accept? d-1. If the opportunity cost of capital is 10%, calculate the NPV for projects A, B, and C. Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. d-2. Which projects have positive NPVs? e. "Payback gives too much weight to cash flows that occur after the cutoff date." True or false?
b) What is the payback period on each of the following projects? Cash Flow in Dollars Project Time 0 1 A -5,000 +1,000 +1,000 +3,000 -1,000 -5,000 B +1,000 +2,000 +3,000 C +1,000 +1,000 +3,000 +5,000 4 1) Given that you wish to use the payback rule with cut off period of 2 years, which project will you accept? Head 2) If you use a cut off period of 3 years, which projects would you accept? 3) If the opportunity cost of capital is 10%, which projects have positive NPVS? 4) "Payback gives too much weight to cash flows that occur after the cutoff date" – Do you agree with this statement. Please explain in short. lictions: On Ps DELL
Consider the following two mutually exclusive projects: Year Cash Flow (X) Cash Flow (Y) 0 −$ 20,200 −$ 20,200 1 8,900 10,200 2 9,200 7,850 3 8,850 8,750 Calculate 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.) What is the crossover rate for these two projects? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What is the NPV of Projects X and Y at discount rates of 0 percent, 15 percent, and 25 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Consider the following two mutually exclusive projects: Year Cash Flow Cash Flow (X) (Y) 0 -$20,800 -$20,800 1 9,050 10,500 2 9,500 8,000 3 9,000 8,900 IRR Project X: 15.49% Project Y: 15.69% What is the crossover rate for these two projects? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Crossover rate ______%
Emusk Inc. is evaluating two mutually exclusive projects. The required rate of return on these projects is 8%. Calculate the incremental IRR (aka cross-over rate) for the two projects. (Enter percentages as decimals and round to 4 decimals). Year 0 1 2 3 4 5 Project A -15,000,000 2,000,000 3,000,000 5,000,000 5,000,000 6,000,000 Project B -15,000,000 6,000,000 6,000,000 6,000,000 1,000,000 1,000,000
Emusk Inc. is evaluating two mutually exclusive projects. The required rate of return on these projects is 8%. Calculate the incremental IRR (aka cross - over rate) for the two projects. (Enter percentages as decimals and round to 4 decimals). Year Project A Project B0-15,000,000-15,000,000 1 2,000,000 6,000,000 2 3,000,000 6,000,000 3 5,000,000 6,000,000 4 5,000,000 1,000,000 5 6,000,000 1,000,000
Emusk Inc. is evaluating two mutually exclusive projects. The required rate of return on these projects is 8%. Calculate the net present value for project A. (Round to 2 decimals) Year 0 1 2 3 4 5 Project A -15,000,000 2,000,000 3,000,000 5,000,000 5,000,000 6,000,000 Project B -15,000,000 6,000,000 6,000,000 6,000,000 1,000,000 1,000,000
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$ 15,456 5,225 8,223 13,013 8,705 0 1 234 -$ 276,363 26,400 51,000 57,000 402,000 Whichever project you choose, if any, you require a 6 percent return on your investment. a. What is the payback period for Project A? Payback period b. What is the payback period for Project B? Payback period c. What is the discounted payback period for Project A? Discounted payback period
Consider the following two mutually exclusive projects: Year Cash Flow (X) Cash Flow (Y)0-$19.100-$ 19,100 18,625 9,650 2 8,650 7,575 3 8,575 8,475 Calculate 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.) What is the crossover rate for these two projects? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.. 32.16.) What is the NPV of Projects X and Y at discount rates of 0 percent, 15 percent, and 25 percent?