NPV and IRR AnalysisCummings Products Company is considering two mutually exclusive investments whose expected net cash flows are as follows:EXPECTED NET CASH FLOWSYearProject AProject B-$340-$630-528210-2192103.-1502104.1,1002108202106.9902107.-325210a. Construct NPV profiles for Projects A and B.Select the correct graph.VPVS)1400VPVS)VPVS)14001400120012001200+100010001000800Project B800Pioject A800+C1 Project B:%c. Calculate the two projects' NPVS, if each project's cost of capital was 11%. Do not round intermediate calculations. Round your answers to the nearest cent.Project A: $Project B: $Which project, if either, should be selected?-Select-v should be selected.Calculate the two projects' NPVS, if each project's cost of dapital was 18%. Do not round intermediate calculations. Round your answers to the nearest cent.Project A: $Project B: $What would be the proper choice?Select-v is the proper choice.d. What is each project's MIRR at a cost of capital of 11%? (Hìnt: Consider Period 7 as the end of Project B's life.) Do not round intermediate calculations. Round youranswers to two decimal places.Project A:%Project B:%What is each project's MIRR at a cost of capital of 18%? (Hint: Consider Period 7 as the end of Project B's life.) Do not round intermediate calculations. Round youranswers to two decimal places.Project A:%Project B:%e. What is the crossover rate? Do not round intermediate calculations. Round your answer to two decimal places.%What is its significance?I. If the cost of capital is greater than the crossover rate, both the NPV and IRR methods will lead to the same project selection.II. If the cost of capital is less than the crossover rate, both the NPV and IRR methods lead to the same project selections.III. The crossover rate has no significance in capital budgeting analysis.-Select- v

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NPV and IRR Analysis Cummings Products Company is considering two mutually exelusive investments whose expected net cash flows are as follows: EXPECTED NET CASH FLOWS Year Project A Project B 0. -$340 -$630 1 -528 210 2. -219 210 3. -150 210 4. 1,100 210 5. 820 210 990 210 -325 210 a. Construct NPV profiles for Projects A and B. Select the correct graph. VPV5)T 1400- VPVS) I VPVS) 1400 1400 1200 1200 1200 1000 1000 1000 800 Project B 800 Pioject A 800

NPV and IRR Analysis Cummings Products Company is considering two mutually exelusive investments whose expected net cash flows are as follows: EXPECTED NET CASH FLOWS Year Project A Project B 0. -$340 -$630 1 -528 210 2. -219 210 3. -150 210 4. 1,100 210 5. 820 210 990 210 -325 210 a. Construct NPV profiles for Projects A and B. Select the correct graph. VPV5)T 1400- VPVS) I VPVS) 1400 1400 1200 1200 1200 1000 1000 1000 800 Project B 800 Pioject A 800

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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Consider the following two projects: Cash flows Project A Project B C0�0 −$ 240 −$ 240 C1�1 100 123 C2�2 100 123 C3�3 100 123 C4�4 100 a. If the opportunity cost of capital is 8%, which of these two projects would you accept (A, B, or both)? b. Suppose that you can choose only one of these two projects. Which would you choose? The discount rate is still 8%. c. Which one would you choose if the cost of capital is 16%? d. What is the payback period of each project? e. Is the project with the shortest payback period also the one with the highest NPV? f. What are the internal rates of return on the two projects? g. Does the IRR rule in this case give the same answer as NPV? h. If the opportunity cost of capital is 8%, what is the profitability index for each project? i. Is the project with the highest profitability index also the one with the highest NPV? j. Which measure should you use to choose between the projects?
please be soecific w answer pls complete the box
Compute the Pl statistic for Project X and note whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 10 percent. Time: Cash flow: Multiple Choice 0 1 -250 75 -0.0977 percent, reject 24.41 percent, accept -9.77 percent, reject -24.41 percent, reject 2 0 3 100 4 5 75 50
Consider two mutually exclusive projects A and B: Cash Flows (dollars) Project Co C₁ A -39,000 28,200 B -59,000 42,000 C₂ NPV at 10% 28,200 42,000 +$ 9,942 +13,893 a. Calculate IRRs for A and B. Note: Do not round intermediate calculations. Enter Project A B IRR 41.98 % 36.05 %
Problem 7: NPV versus IRR. Consider the following two mutually exclusive projects: Year Cash flow Cash flow (X) (Y) O 1 2 3 -9500 5800 4000 4000 PART 7A: The NPV for X is $ Answer: 2083.77 -9500 3500 5000 6000 if the required rate of return is 10%.
You are analyzing two proposed capital investments with the following cash flows: Year Project X Project Y - $20,000 - $20,000 12,630 7,470 5,660 7,470 3 6,360 7,470 4 1,920 7,470 1, 2.
Hansaben
"Consider the following two mutually-exclusive altematives: Project Alternatives n Project A1 Cash Flows Project A2 Cash Flows 0-514,000 1+$4,000 - $17,000 $21,000 2- 54,000 3-$12,000 If MARR=15% and assuming indefinite required service and repeatability, use the incremental NPV and IRR analyses in parts (a) and (b) of the problem, respectively, to choose the project in part (c). Please note that project alternatives A7 and A2 have different lives, namely three years for A1 and one year for A2. The alternatives should be compared over the same period, so project A2 will have to be repeated twice." axThe Net Present Value of the incremental investment is: YbrThe rternal Rate of Retun of the incremental investment is: (oWe shoulo choose project alternative: Note: Please enrer your onswvers to two decimal places. If using the interest factor method, apply the value of the factor os presented in the table or spreocsheet (with all four decimal places).
The answer is project B but please answer why that is the correct answer. Engineering economic question
QUESTION 3 If the cash flows for Project M are CO= -2,000; C1 = +400; C2 = +1,400; and C3= +1,300, calculate the IRR for the project. Please input the percentage format for your answer. And there is no need to put the percentage sign (%).
Consider the following projects: Project Co C₁ Cash Flows ($) C2 C3 CA C5 A -1,300 1,300 0 0 0 0 B -2,600 1,300 1,300 4,300 1,300 1,300 C -3,250 1,300 1,100 0 1,300 1,300 a. If the opportunity cost of capital is 9%, which project(s) have a positive NPV? b. Calculate the payback period for each project. c. Which project(s) would a firm using the payback rule accept if the cutoff period is three years? Complete this question by entering your answers in the tabs below. Required A Required B Required C If the opportunity cost of capital is 9%, which project(s) have a positive NPV? Note: Do not round intermediate calculations. Positive NPV project(s) Projects B and C Required A Required B
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