THIS PROBLEM CONTAINS FOUR QUESTIONS AND EACH QUESTION IS WORTH 4 POINTS. The following cash flows are estimated for two mutually exclusive projects. year Project A CF Project B CF 0 -90000 -150000 1 30000 50000 2 40000 50000 3 20000 4 20000 40000 40000 QUESTION #1. Based on the Payback rule, NEITHER PROJECT A OI would be selected. QUESTION #2. Based on the Internal rate of return (IRR) rule, choose your answer... QUESTION #3. Based on the Net Present Value (NPV) rule, choose your answer... 9.45%. QUESTION #4. Based on the Profitability Index (PI) rule, choose your answer... would be selected. ✓ would be selected if the discount rate was higher than 6.28% but lower than would be selected if the discount rate was 6%.
THIS PROBLEM CONTAINS FOUR QUESTIONS AND EACH QUESTION IS WORTH 4 POINTS. The following cash flows are estimated for two mutually exclusive projects. year Project A CF Project B CF 0 -90000 -150000 1 30000 50000 2 40000 50000 3 20000 4 20000 40000 40000 QUESTION #1. Based on the Payback rule, NEITHER PROJECT A OI would be selected. QUESTION #2. Based on the Internal rate of return (IRR) rule, choose your answer... QUESTION #3. Based on the Net Present Value (NPV) rule, choose your answer... 9.45%. QUESTION #4. Based on the Profitability Index (PI) rule, choose your answer... would be selected. ✓ would be selected if the discount rate was higher than 6.28% but lower than would be selected if the discount rate was 6%.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 13P
Related questions
Question
![THIS PROBLEM CONTAINS FOUR QUESTIONS AND EACH QUESTION IS WORTH 4 POINTS.
The following cash flows are estimated for two mutually exclusive projects.
year
Project A CF
Project B CF
0
-90000
-150000
1
30000
50000
2
40000
50000
3
20000
4
20000
40000
40000
QUESTION #1. Based on the Payback rule, NEITHER PROJECT A OI would be selected.
QUESTION #2. Based on the Internal rate of return (IRR) rule, choose your answer...
QUESTION #3. Based on the Net Present Value (NPV) rule, choose your answer...
9.45%.
QUESTION #4. Based on the Profitability Index (PI) rule, choose your answer...
would be selected.
✓ would be selected if the discount rate was higher than 6.28% but lower than
would be selected if the discount rate was 6%.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe19ca8af-1e30-430c-8471-390b892d65f4%2F690da537-f2bb-4a75-a91b-16152451865f%2Fygytioi_processed.png&w=3840&q=75)
Transcribed Image Text:THIS PROBLEM CONTAINS FOUR QUESTIONS AND EACH QUESTION IS WORTH 4 POINTS.
The following cash flows are estimated for two mutually exclusive projects.
year
Project A CF
Project B CF
0
-90000
-150000
1
30000
50000
2
40000
50000
3
20000
4
20000
40000
40000
QUESTION #1. Based on the Payback rule, NEITHER PROJECT A OI would be selected.
QUESTION #2. Based on the Internal rate of return (IRR) rule, choose your answer...
QUESTION #3. Based on the Net Present Value (NPV) rule, choose your answer...
9.45%.
QUESTION #4. Based on the Profitability Index (PI) rule, choose your answer...
would be selected.
✓ would be selected if the discount rate was higher than 6.28% but lower than
would be selected if the discount rate was 6%.
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