Question
Consider the following cash flows from different projects and assume the cost of capital is 12%: n A B C D 0 -$3500 -$5000 -$7500
Consider the following cash flows from different projects and assume the cost of capital is 12%:
n | A | B | C | D |
0 | -$3500 | -$5000 | -$7500 | -$4000 |
1 | 800 | 2000 | 2000 | 5000 |
2 | 800 | 1500 | 2000 | 3000 |
3 | 800 | 1500 | 2000 | -2500 |
4 | 800 | 500 | 4000 | -1000 |
5 | 800 | 500 | 5000 | 1000 |
6 | 800 | 1500 | 2000 | |
7 | 800 | 3000 | ||
8 | 800 |
a). Calculate the payback period for each project.
b). Determine whether it is meaningful to calculate a payback period for the project D.
c). Calculate the discounted payback period for each project.
d). Calculate the NPV of each project.
e). Calculate Profitability Index of each project.
f). calculate the IRR for each prject
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
10th edition
978-0077511388, 78034779, 9780077511340, 77511387, 9780078034770, 77511344, 978-0077861759
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