The required return on these investments is 13 perc a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) e. Based on your answers in (a) through (d), which project will you finally choose?

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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The required return on these investments is 13 percent.
a. What is the payback period for each project? (Do not round intermediate calculations
and round your answers to 2 decimal places, e.g., 32.16.)
b. What is the NPV for each project? (Do not round intermediate calculations and round
your answers to 2 decimal places, e.g., 32.16.)
c. What is the IRR for each project? (Do not round intermediate calculations and enter
your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
d. What is the profitability index for each project? (Do not round intermediate
calculations and round your answers to 3 decimal places, e.g., 32.161.)
e. Based on your answers in (a) through (d), which project will you finally choose?
a. Project A
Project B
b. Project A
Project B
c. Project A
Project B
d. Project A
Project B
e. Project acceptance
years
years
%
je go
%
Transcribed Image Text:The required return on these investments is 13 percent. a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) e. Based on your answers in (a) through (d), which project will you finally choose? a. Project A Project B b. Project A Project B c. Project A Project B d. Project A Project B e. Project acceptance years years % je go %
Consider the following two mutually exclusive projects:
Year Cash Flow (A) Cash Flow (B)
0
1
2
3
4
-$245,000
34,000
49,000
51,000
325,000
-$53,000
31,900
21,800
17,300
16,200
The required return on these investments is 13 percent.
a. What is the payback period for each project? (Do not round intermediate calculations
and round your answers to 2 decimal places, e.g., 32.16.)
b. What is the NPV for each project? (Do not round intermediate calculations and round
your answers to 2 decimal places, e.g., 32.16.)
c. What is the IRR for each project? (Do not round intermediate calculations and enter
your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
d. What is the profitability index for each project? (Do not round intermediate
calculations and round your answers to 3 decimal places, e.g., 32.161.)
e. Based on your answers in (a) through (d), which project will you finally choose?
Transcribed Image Text:Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 1 2 3 4 -$245,000 34,000 49,000 51,000 325,000 -$53,000 31,900 21,800 17,300 16,200 The required return on these investments is 13 percent. a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) e. Based on your answers in (a) through (d), which project will you finally choose?
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