Question 1 options: The Williamson Corporation Ltd. is considering investing in the following projects. Project A requires an immediate cash outlay of $1,000. Project B requires an immediate cash outlay of $1,800. It has a cost of capital of 7%. After taxes net cash flows generated by each investment at the end of each year have been as follows: Project A Project B Year 1 500 700 Year 2 300 700 Year 3 500 500 Year 4 500 700 Year 5 0 700 What is the Payback period for Project A? Round to 2 decimals. What is the payback period for Project B? Round to 2 decimals. What is the NPV for Project A? Round to the nearest dollar. Include - if negative. No Commas. What is the IRR for project A? Round to 2 decimals. No %. What is the NPV for Project B? Round to the nearest dollar. Include - if negative. No commas. What is the IRR for project B? Round to 2 decimals. No %. What is the Profitability Index for project A? Round to 2 decimals. What is the Profitability Index for project B? Round to 2 decimals. Regardless of your answers above, if project A had a PI of 1.50 and project B was 1.85, according to capital rationing, which project would you choose? A or B. Type in A or B just like this.
Question 1 options:
The Williamson Corporation Ltd. is considering investing in the following projects.
Project A requires an immediate cash outlay of $1,000.
Project B requires an immediate cash outlay of $1,800.
It has a cost of capital of 7%.
After taxes net cash flows generated by each investment at the end of each year have been as follows:
Project A Project B
Year 1 500 700
Year 2 300 700
Year 3 500 500
Year 4 500 700
Year 5 0 700
What is the Payback period for Project A? Round to 2 decimals.
What is the payback period for Project B? Round to 2 decimals.
What is the NPV for Project A? Round to the nearest dollar. Include - if negative. No Commas.
What is the
What is the NPV for Project B? Round to the nearest dollar. Include - if negative. No commas.
What is the IRR for project B? Round to 2 decimals. No %.
What is the Profitability Index for project A? Round to 2 decimals.
What is the Profitability Index for project B? Round to 2 decimals.
Regardless of your answers above, if project A had a PI of 1.50 and project B was 1.85, according to capital rationing, which project would you choose? A or B. Type in A or B just like this.
Step by step
Solved in 2 steps with 2 images
