Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$426,000 –$40,500 1 43,500 20,500 2 62,500 13,200 3 79,500 19,100 4 541,000 15,900 The required return on these investments is 12 percent. a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) 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. What is 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.)
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$426,000 –$40,500 1 43,500 20,500 2 62,500 13,200 3 79,500 19,100 4 541,000 15,900 The required return on these investments is 12 percent. a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) 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. What is 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.)
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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Question
| Consider the following two mutually exclusive projects: |
| Year | Cash Flow (A) | Cash Flow (B) |
| 0 | –$426,000 | –$40,500 |
| 1 | 43,500 | 20,500 |
| 2 | 62,500 | 13,200 |
| 3 | 79,500 | 19,100 |
| 4 | 541,000 | 15,900 |
|
The required |
|
| a. | What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| 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. | What is the |
| d. | 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.) |
| e. | Based on your answers in (a) through (d), which project will you finally choose? |
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| d. | 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.) |
Using excel how to I find the PI for this question?
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