23. Calculate the Profitability Index (P.1.) for each project below. Which one or ones should the manager send to Corporate if the manager has only $200,000 to spend in capital budgets this year? Project A B D E F Calculate the P.I. Initial outlay $56,000 $17,500 $225,000 $25,000 $100,000 $40,000 PV of future net cash flows $100,000 $35,000 $400,000 $100,000 $250,000 $45,000 a. With only $200,000, do projects: A and B b. A, C, and E A, B, D, and E d. Do all projects as every project has P.I. > 1 c. 24 Consider the following CFFA: What is the IRR of this project using the CFFA? 0 1 2 3 OCF 0 56,000 73,000 67,000 ANCF -10,000 10,000 NCS -135,000 0 CFFA -145,000 56,000 73,000 77,000 a. b. DHE ONE IRR = 15.77% IRR = 18.71% IRR = 27.4% IRR = 29.4% out we osobo C. d. Chapter 9: Making capital market investment decisions (8 questions) 5. a. The stand-alone principle means that: only projects that are completely different from all other projects can be examined. b. projects are examined by the incremental cash flows that they generate. projects must be added to the rest of the firm and examine the whole firm with and without the project. d. the project that puts its flag first on top of the mountain stands alone. C. Which of the following should NOT be included in most common cash flow analyses? a. taxes b. operating cash flows C. financing costs d. positive or negative side effects on other projects