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?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 10P: Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year...
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![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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F850a511b-1075-4cdf-92ff-203b7b9fccf5%2Fd616ccb0-527a-45ee-ba0b-d9bb373769a1%2F5ltsortr_processed.png&w=3840&q=75)
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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