Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 8%. Project A -1,160 660 380 210 260 Project B -1,160 260 315 360 710 What is Project A's NPV? Do not round intermediate calculations. Round your answer to the nearest cent. What is Project B's NPV? Do not round intermediate calculations. Round your answer to the nearest cent. If the projects were independent, which project(s) would be accepted? -Select- If the projects were mutually exclusive, which project(s) would be accepted? -Select-
Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 8%. Project A -1,160 660 380 210 260 Project B -1,160 260 315 360 710 What is Project A's NPV? Do not round intermediate calculations. Round your answer to the nearest cent. What is Project B's NPV? Do not round intermediate calculations. Round your answer to the nearest cent. If the projects were independent, which project(s) would be accepted? -Select- If the projects were mutually exclusive, which project(s) would be accepted? -Select-
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
Please see image to answer question.
Options for whether to accept project questions are;
- Neither
- Project A
- Project B
- Both project A and project B
Transcribed Image Text:Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net
operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 8%.
1
3
4
Project A
-1,160
660
380
210
260
Project B
-1,160
260
315
360
710
What is Project A's NPV? Do not round intermediate calculations. Round your answer to the nearest cent.
$
What is Project B's NPV? Do not round intermediate calculations. Round your answer to the nearest cent.
2$
If the projects were independent, which project(s) would be accepted?
|-Select-
If the projects were mutually exclusive, which project(s) would be accepted?
-Select-
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