Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 13 percent. Year Project F Project G0-$137,000-$ 207,000 1 59,000 39,000 2 51,000 54,000 3 61,000 91,000 4 56,000 121,000 5 51,000 136,000 a. Calculate the payback period for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e .g., 32.16.) b. Calculate the NPV for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Which project, if any, should the company accept?
Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 13 percent. Year Project F Project G0-$137,000-$ 207,000 1 59,000 39,000 2 51,000 54,000 3 61,000 91,000 4 56,000 121,000 5 51,000 136,000 a. Calculate the payback period for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e .g., 32.16.) b. Calculate the NPV for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Which project, if any, should the company accept?
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
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Transcribed Image Text:Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a
three-year cutoff for projects. The required return is 13 percent. Year Project F Project G0-$137,000-$
207,000 1 59,000 39,000 2 51,000 54,000 3 61,000 91,000 4 56,000 121,000 5 51,000 136,000 a. Calculate the
payback period for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e
.g., 32.16.) b. Calculate the NPV for both projects. (Do not round intermediate calculations and round your answers to
2 decimal places, e.g., 32.16.) c. Which project, if any, should the company accept?
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