Nautilus Company is going to make an investment of $700,000 in a machine and the following are the cash flows that two different products would bring in years one through four. The company's required rate of return is 12%. Option A Option B $245,000 $225,000 $195,000 $295,000 $245,000 $275,000 $250,000 $225,000 Using the appropriate EXCEL spreadsheet in the Chapter11 NPV IRR Analysis.xlsx, answer the following questions: • What is the NPV for Option A? • What is the NPV for Option B?
Nautilus Company is going to make an investment of $700,000 in a machine and the following are the cash flows that two different products would bring in years one through four. The company's required rate of return is 12%. Option A Option B $245,000 $225,000 $195,000 $295,000 $245,000 $275,000 $250,000 $225,000 Using the appropriate EXCEL spreadsheet in the Chapter11 NPV IRR Analysis.xlsx, answer the following questions: • What is the NPV for Option A? • What is the NPV for Option B?
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
![Nautilus Company is going to make an investment of $700,000 in a machine and the following are the cash flows that two different
products would bring in years one through four. The company's required rate of return is 12%.
Option A
Option B
$245,000
$225,000
●
$195,000
$295,000
$245,000
●
$275,000
$250,000
Using the appropriate EXCEL spreadsheet in the Chapter 11 NPV IRR Analysis.xlsx, answer the following questions:
What is the NPV for Option A?
What is the NPV for Option B?
What is the IRR for Option A?
What is the IRR for Option B?
$225,000
PLEASE NOTE #1: The dollar amounts will be with "$" and commas as needed and rounded to two decimal places (i.e. $12,345.67).
Round your IRR answers, in percentage format, to two decimal places (i.e. 12.34%).
Given the above answers, which project should the company invest in? Project
PLEASE NOTE #2: Your answer is either "A" or "B" - capital letter, no quotes.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6e1977ae-bab2-45cd-ad9b-1bdaf8cd8b26%2F27f13152-64f4-4758-903c-05d1613111f0%2Fi0n6jgc_processed.png&w=3840&q=75)
Transcribed Image Text:Nautilus Company is going to make an investment of $700,000 in a machine and the following are the cash flows that two different
products would bring in years one through four. The company's required rate of return is 12%.
Option A
Option B
$245,000
$225,000
●
$195,000
$295,000
$245,000
●
$275,000
$250,000
Using the appropriate EXCEL spreadsheet in the Chapter 11 NPV IRR Analysis.xlsx, answer the following questions:
What is the NPV for Option A?
What is the NPV for Option B?
What is the IRR for Option A?
What is the IRR for Option B?
$225,000
PLEASE NOTE #1: The dollar amounts will be with "$" and commas as needed and rounded to two decimal places (i.e. $12,345.67).
Round your IRR answers, in percentage format, to two decimal places (i.e. 12.34%).
Given the above answers, which project should the company invest in? Project
PLEASE NOTE #2: Your answer is either "A" or "B" - capital letter, no quotes.
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