Crane Corp. management is evaluating two mutually exclusive projects. The cost of capital is 15 percent. Costs and cash flows for each project are given in the following table. Calculate NPV and IRR of two projects. (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525. Round IRR answers to 2 decimal places, e.g. 15.25 or 12.25%.) NPV of project 1 is $ NPV of project 2 is $ IRR of project 1 is % IRR of project 2 is % Which project should be accepted? Crane Corp. should accept project 1 project 2 neither project
Crane Corp. management is evaluating two mutually exclusive projects. The cost of capital is 15 percent. Costs and cash flows for each project are given in the following table. Calculate NPV and IRR of two projects. (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525. Round IRR answers to 2 decimal places, e.g. 15.25 or 12.25%.) NPV of project 1 is $ NPV of project 2 is $ IRR of project 1 is % IRR of project 2 is % Which project should be accepted? Crane Corp. should accept project 1 project 2 neither 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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Crane Corp. management is evaluating two mutually exclusive projects. The cost of capital is 15 percent. Costs and cash flows for each project are given in the following table.
Calculate NPV and
| NPV of project 1 is | $ | ||
| NPV of project 2 is | $ | ||
| IRR of project 1 is | % | ||
| IRR of project 2 is | % |
Which project should be accepted?
|
Crane Corp. should accept project 1 project 2 neither project |
Transcribed Image Text:Year
Project 1
Project 2
-$1,226,380
-$1,250,112
1
225,000
363,000
2
342,000
363,000
3
414,000
363,000
4
493,000
363,000
5
753,000
363,000
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