Novell, Inc., has the following mutually exclusive projects.Year Project A Project B0$27,000 $30,000115,5002 12,0003 3,60016,50010,50012,000a-1. Calculate the payback period for each project. (Do not round intermediatecalculations and round your answers to 3 decimal places, e.g., 32.161.)Project AProject B1.958 years2.250 yearsa-2. If the company's payback period is two years, which, if either, of these projectsshould be chosen?Project AProject B Project AProject BBoth projectsNeither projectb-1. What is the NPV for each project if the appropriate discount rate is 14 percent? (Anegative answer should be indicated by a minus sign. Do not round intermediatecalculations and round your answers to 2 decimal places, e.g., 32.16.)Project AProject Bb-2. Which, if either, of these projects should be chosen if the appropriate discount rateis 14 percent?O Project AO Project BO Both projectsNeither project

Payback period--It represents the time period required for recovery of the initial investment in the…

Novell, Inc., has the following mutually exclusive projects. Year Project A Project B 0 $27,000 $30,000 1 15,500 2 12,000 3 3,600 16,500 10,500 12,000 a-1. Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Project A Project B 1.958 years 2.250 years a-2. If the company's payback period is two years, which, if either, of these projects should be chosen? Project A

Novell, Inc., has the following mutually exclusive projects. Year Project A Project B 0 $27,000 $30,000 1 15,500 2 12,000 3 3,600 16,500 10,500 12,000 a-1. Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Project A Project B 1.958 years 2.250 years a-2. If the company's payback period is two years, which, if either, of these projects should be chosen? Project A

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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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 11 percent. Year 0 12345 Project F $129,000 63,000 47,000 57,000 52,000 47,000 Project G $199,000 43,000 58,000 87,000 117,000 132,000
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Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Year Cash Flow (A) Cash Flow (B) 01234 -$40,000 14,000 18,000 17,000 11,000 -$ 55,000 11,000 13,000 16,000 255,000 What is the payback period for both projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project A Project B years years Which project should the company accept? O Project A Project B
Boca Incorporated and Davie Corporation are two mutually exclusive projects: A WACC O 20.62% O $5500 O 8.16% O 21.88% time 0 1 2 3 4 O 11% 8.25% (8500.00) 3600.00 2400.00 2850.00 5200.00 You are asked to provide an NPV profile for these two projects. At which rate will the NPVs for the two projects be equal? B (9500.00) 3900.00 2900.00 2900.00 5550.00
X will pay $80,000 for a project that will generate the following cash flows: YEAR 1 2 3 4 5 7 8 CASH FLOW $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $30,000 $30,000 The payback period for the investment is: O 7 years O 6.25 years O 7 years O 7.33 years
son.3
-) Hanse, Incorporated, has the following two mutually exclusive projects available. Year 0 Project R -$ 47,000 Project S -$ 71,000 17,000 1234 17,000 23,000 5 9,000 5,000 18,000 18,000 33,000 29,000 7,000 a. What is the crossover rate for these two projects? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the NPV of each project at the crossover rate? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. S a. Crossover rate b. Project R Project S %
21. NPV and Payback Period 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 10 percent. Ι Year Project F Project G 0 -$195,000 -$298,000 1 98,400 71,600 2345 86,300 94,500 81,600 123,600 72,000 166,800 64,800 187,200 a. Calculate the payback period for both projects. b. C. Calculate the NPV for both projects. Which project, if any, should the company accept?
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The profitability analysis of three projects is provided below: Project A Project B Project C NPV $10,000 $5,000 - $1,000 IRR 10% 15% 15% WACC 8% 12% 16% If these projects were independent, which project(s) would be accepted? Why? If these projects were mutually exclusive, which project(s) would be accepted? Why?
ic Yo NS io cer ist bun ngs nnée Current Attempt in Progress Blossom Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $905,000, and project B's cost is $1,247,300. Cash flows from both projects are given in the following table. Year 1 2 3 4 Project A $86,212 313,562 427,594 285,552 Project B $586,212 413,277 231,199 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.) Discounted payback period of project A Discounted payback period of project B will he accepted with a discount rate of 8 percent? átv zoom
Consider the following fourmutually exclusive projects: Project J, K, L, and M. Assume that the investment in each project gets perpetually renewed (all the projects are perpetual). The cost of capital is 16%. Rank the projects according to profitability J K L M Initial investment 49,000 75,000 65,000 35,000 Annual cash flow 21,000 8,000 16,000 13,000 Lifecycle (years) 6 26 14 5s You are going to want to find the NPV and EAC of the cash flows. Since all of the cash flows are the same, you can use the PV function. Pay attention to the sign of the cash flows! You can also use the RANK function to rank the EACs for the four projects.

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