Coore Manufacturing has the following two possible projects. The required return is 12 percent. Year Project Y Project Z 0 -$27,500 -$55,000 1 13,500 19,500 234 11,900 26,000 14,300 17,500 9,900 24,000 a. 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.) 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. Which, if either, of the projects should the company accept? a. Project Y Project Z 1.38 b. Project Y 3 decimal places required. Project Z c. Accept project
Coore Manufacturing has the following two possible projects. The required return is 12 percent. Year Project Y Project Z 0 -$27,500 -$55,000 1 13,500 19,500 234 11,900 26,000 14,300 17,500 9,900 24,000 a. 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.) 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. Which, if either, of the projects should the company accept? a. Project Y Project Z 1.38 b. Project Y 3 decimal places required. Project Z c. Accept project
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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Transcribed Image Text:Coore Manufacturing has the following two possible projects. The required return is 12
percent.
Year Project Y
Project Z
0
-$27,500
-$55,000
1
13,500
19,500
234
2
11,900
26,000
3
14,300
17,500
9,900
24,000
a. 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.)
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. Which, if either, of the projects should the company accept?
a. Project Y
Project Z
1.38
ง
b. Project Y 3 decimal places required.
Project Z
c. Accept project
x
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