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3 10 points eBook Print References Consider the following two projects: Cash flows Project A Project B -$ 210 -$ 210 85 85 85 85
3 10 points eBook Print References Consider the following two projects: Cash flows Project A Project B -$ 210 -$ 210 85 85 85 85 BUGUU a. If the opportunity cost of capital is 8%, which of these two projects would you accept (A, B, or both)? b. Suppose that you can choose only one of these two projects. Which would you choose? The discount rate is still 8%. c. Which one would you choose if the cost of capital is 12%? d. What is the payback period of each project? 107 107 107 e. Is the project with the shortest payback period also the one with the highest NPV? f. What are the internal rates of return on the two projects? g. Does the IRR rule in this case give the same answer as NPV? h-1. If the opportunity cost of capital is 8%, what is the profitability index for each project? h-2. Is the project with the highest profitability index also the one with the highest NPV? h-3. Which measure should you use to choose between the projects? Complete this question by entering your answers in the tabs below. Req A Req B Req C Req D Req E Req H2 Req H3 Ch
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