Question
1.Compute the NPV statistic for Project Y and note whether the firm should accept or reject the project with the cash flows shown below if
1.Compute the NPV statistic for Project Y and note whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 12 percent. (2 points)
Project Y
Time | 0 | 1 | 2 | 3 | 4 |
Cash Flow | -$9,000 | $3,500 | $4,300 | $1,550 | $900 |
2.Compute the NPV statistic for Project K and recommend whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is six percent. (3 points)
Project K
Time | 0 | 1 | 2 | 3 | 4 | 5 |
Cash Flow | -$10,000 | $5,000 | $-6,000 | $6,000 | $7,000 | $10,000 |
3.Compute the payback statistic for Project A and recommend whether the firm should accept or reject the project with the cash flows, shown below if the appropriate cost of capital is eight percent and the maximum allowable payback is four years. (2 points)
Project A
Time | 0 | 1 | 2 | 3 | 4 | 5 |
Cash Flow | -$1,000 | $350 | $480 | $520 | $300 | $100 |
4.Compute the discounted payback statistic for Project D and recommend whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 12 percent and the maximum allowable discounted payback is four years. (4 points)
Project D
Time | 0 | 1 | 2 | 3 | 4 | 5 |
Cash Flow | -$11,000 | $3,350 | $4,180 | $1,520 | $0 | $1,000 |
5.Compute the IRR statistic for project F and note whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 12 percent. (3 points)
Project F
Time | 0 | 1 | 2 | 3 | 4 |
Cash Flow | -$11,000 | $3,350 | $4,180 | $1,520 | $2,000 |
6.Compute the MIRR statistic for Project I and tell whether to accept or reject the project with the cash flows shown below if the appropriate cost of capital is 12 percent. (6 points)
Project I
Time | 0 | 1 | 2 | 3 | 4 |
Cash Flow | -$11,000 | $5,330 | $4,180 | $1,520 | $2,000
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