Fransico Ltd. is trying to determine which of three projects it wants to invest in. All three projects have been analyzed into Net Present Value amounts. (Round your answers to two decimal places when needed and use rounded answers for all future calculations). 1. Calculate the Net Present Value based on the following information: Cash Flows Project 2 Project 6 Project 12 Present Value of net cash inflows $491,900 $778,300 $503,700 Initial InvestmentSingle line $146,000Single line $407,400Single line $206,400Single line Single lineNet Present ValueDouble line Single lineDouble line Single lineDouble line Single lineDouble line 2. Calculate the Profitability Index for each of the projects. Round to two decimal places. Project Present value of net cash inflows / Initial Investment = Profitability Index 2 / = 6 / = 12 / = 3. Based on the Profitability Index, which project should be selected?
Fransico Ltd. is trying to determine which of three projects it wants to invest in. All three projects have been analyzed into Net Present Value amounts. (Round your answers to two decimal places when needed and use rounded answers for all future calculations). 1. Calculate the Net Present Value based on the following information: Cash Flows Project 2 Project 6 Project 12 Present Value of net cash inflows $491,900 $778,300 $503,700 Initial InvestmentSingle line $146,000Single line $407,400Single line $206,400Single line Single lineNet Present ValueDouble line Single lineDouble line Single lineDouble line Single lineDouble line 2. Calculate the Profitability Index for each of the projects. Round to two decimal places. Project Present value of net cash inflows / Initial Investment = Profitability Index 2 / = 6 / = 12 / = 3. Based on the Profitability Index, which project should be selected?
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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Fransico Ltd. is trying to determine which of three projects it wants to invest in. All three projects have been analyzed into
(Round your answers to two decimal places when needed and use rounded answers for all future calculations).
1. Calculate the Net Present Value based on the following information:
| Cash Flows | Project 2 | Project 6 | Project 12 |
|---|---|---|---|
| Present Value of net |
$491,900 | $778,300 | $503,700 |
| Initial InvestmentSingle line | $146,000Single line | $407,400Single line | $206,400Single line |
| Single lineNet Present ValueDouble line | Single lineDouble line | Single lineDouble line | Single lineDouble line |
2. Calculate the Profitability Index for each of the projects. Round to two decimal places.
| Project | Present value of net cash inflows | / | Initial Investment | = | Profitability Index |
|---|---|---|---|---|---|
| 2 | / | = | |||
| 6 | / | = | |||
| 12 | / | = |
3. Based on the Profitability Index, which project should be selected?
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