A firm has two possible investments with the following cash inflows Each investment costs $510, and the cost of capital is eight percent Use Appendix B and Appendix D to answer the questions Assume that the investments are not mutually exclusive and there are no budget restrictions Cash Inflows Year A B 1 $310 $200 2 LBO 200 3 110 200 a Based on each investment's net present value, which investment(s) should the firm make Use a minus sign to enter negative values, if any Round your answers to the nearest dollar Investment A $ Investment B $ The firm should make Select b Based on each investment's internal rate of return, which investment(s) should the firm make7 Round your answers to the nearest whole number Investment A Investment The firm should make Select Is this the same answer you obtained in part b It Select the same answer as obtained in part b c If the cost of capital were to increase to 10 percent, which investment() should the firm make Use a minus sign to enter negative values, if any, Round your answers for the net present values to the nearest dollar and for Internal rates of return to the nearest whole number Net present values Investment A $ Interest Factors for the Present Value of One Dollar Time Period (e g year) 1 2 3 7 935 WN 980 961 942 971 943 915 889 863 610 552 412 Interest Factors for the Present Value of an Annuity of One Dollar Time Period (e g year) 1 2 3 4 5 2 3 5 6 7 8 9 10 12 14 16 18 20 24 28 32 36 0 990 0 980 0 971 0 962 0 952 0 943 0 935 0 926 0 917 0 909 0 893 0 877 0 862 0 847 0 833 0 806 0 781 0 758 0 735 1970 1942 1913 1 886 1 859 1833 1 808 1 783 1 759 1736 1 690 1 647 1 605 1 566 1 528 1 457 1 392 1 332 1 276 2 941 2 884 2 829 2 775 2 723 2 673 2 624 2 577 2 531 2 487 2 402 2 322 2 246 2174 2 106 1981 1 868 1 766 1674 3 902 3 808 3 717 3,630 3 546 3 465 3 387 3312 3 240 3 170 3 037 2 914 2 798 2 690 2 589 2 404 2 241 2 096 1966 4 853 4 713 4 580 4 452 4 329 4212 4 100 3 993 3 890 3 791 3 605 3 433 3 274 3 127 2991 2 745 2 532 2345 2 181 6 7 8 9 10 5 795 5 601 5 417 5 242 5 076 4 917 4 766 4 623 4 486 4 355 4 111 3 889 3 685 3 498 3 326 3 020 2 759 2 534 2 399 6 728 6 472 6 230 6 002 5 786 5 582 5 389 5 206 5 033 4 868 4 564 4 288 4,039 3 812 3 605 3 242 2 937 2 678 2 455 7 652 7325 7 020 6 733 6 463 6 210 5 971 5 7475 535 5 335 4 968 4,639 4 344 4 078 3 837 3 421 3 076 2 786 2 540 8 566 8 1627 786 7 435 7108 6,802 6 515 6 247 5 985 5 759 5 328 4 946 4,607 4,303 4 031 3 566 3 184 2 868 2603 9 471 8 983 8 530 8 111 7722 7360 7 024 6 710 6 418 6 145 5 650 5 216 4 833 4 494 4 193 3 682 3 269 2 930 2 650 11 12 13 14 15 10 368 9 787 9 253 8 760 8 306 7 887 7 499 7 139 6 805 6 495 5 988 5 453 5 029 4 656 4 327 3 776 3 335 2978 2 683 11 255 10 575 9 954 9 385 8 863 8 384 7943 7 536 7161 6 814 6 194 5 660 5 197 4 793 4 439 3 851 3 387 3 013 2 708 12 134 11 348 10 635 9 986 9 394 8 534 8 358 7904 7487 7 103 6 424 5 842 5 342 4910 4 533 3 912 3 427 3 040 2727 13,004 12 106 11 296 10 563 9 899 9 295 8 745 8 244 7786 7367 6,628 6 002 5 468 5 008 4 611 3 962 3 459 3 061 2 740 13 865 12 849 11 938 11 118 10 380 9 712 9 108 8 559 8,060 7606 6 811 6 142 5 575 5,092 4 675 4 001 3 483 3,076 2 750 16 17 18 19 20 14 718 13 578 12 561 11 652 10 838 10 106 9,447 8 851 8 312 7 824 6 974 6 265 5 669 5 162 4 730 4 003 3 503 3 088 2 758 15 562 14 292 13 166 12 166 11 274 10 477 9763 9 122 8,544 8 002 7 120 6 373 5 749 5 222 4 775 4 059 3 518 3,097 2 763 16 398 14992 13 754 12 659 11690 10 828 10 059 9 372 8 756 8 2017 250 6 467 5 818 5 273 4 812 4 080 3 529 3 104 2 767 17 226 15 678 14,324 13 134 12 085 11 158 10 336 9 604 8 950 8 365 2366 6550 5 877 5 3164 844 4 097 3 539 3 109 2 770 18 046 16 351 14 877 13 590 12 462 11 470 10 594 9 818 9 128 8 514 7 469 6 623 5 929 5353 4 870 4 110 3 546 3 113 2 772 25 22 023 19 523 17413 15 622 14,094 12 783 11 654 10 675 9 823 9 077 7 843 6 873 6 097 5 467 4 948 4 147 3 564 3 122 2 776 30 25 808 22937 19 600 12292 15 373 13 765 12 409 11 258 10 274 9 427 8 055 7 003 6 177 5 517 4 9794 160 3 569 3 124 2 778 c If the cost of capital were to increase to 10 percent, which investment(s) should the firm make Use a minus sign to enter negative values, if any, Round your answers for the net present values to the nearest dollar and for internal rates of return to the nearest whole number Net present values Investment A $ Investment B $ Internal rates of return Investment A 9 Investment B The firm should make elect

Question

A firm has two possible investments with the following cash inflows  Each investment costs $510, and the cost of capital is eight percent  Use Appendix B and Appendix D to answer the questions  Assume that the investments are not mutually exclusive and there are no budget restrictions Cash Inflows Year A B 1 $310 $200 2 LBO 200 3 110 200 a  Based on each investment's net present value, which investment(s) should the firm make  Use a minus sign to enter negative values, if any  Round your answers to the nearest dollar Investment A  $ Investment B  $ The firm should make Select b  Based on each investment's internal rate of return, which investment(s) should the firm make7 Round your answers to the nearest whole number Investment A    Investment     The firm should make Select Is this the same answer you obtained in part b  It Select the same answer as obtained in part b  c  If the cost of capital were to increase to 10 percent, which investment() should the firm make  Use a minus sign to enter negative values, if any, Round your answers for the net present values to the nearest dollar and for Internal rates of return to the nearest whole number Net present values  Investment A  $ Interest Factors for the Present Value of One Dollar Time Period (e g year) 1 2  3  7  935 WN 980 961 942 971 943 915 889 863 610 552 412 Interest Factors for the Present Value of an Annuity of One Dollar Time Period (e g  year) 1 2 3 4 5 2  3  5  6  7  8  9  10  12  14  16  18  20  24  28  32  36  0 990 0 980 0 971 0 962 0 952 0 943 0 935 0 926 0 917 0 909 0 893 0 877 0 862 0 847 0 833 0 806 0 781 0 758 0 735 1970 1942 1913 1 886 1 859 1833 1 808 1 783 1 759 1736 1 690 1 647 1 605 1 566 1 528 1 457 1 392 1 332 1 276 2 941 2 884 2 829 2 775 2 723 2 673 2 624 2 577 2 531 2 487 2 402 2 322 2 246 2174 2 106 1981 1 868 1 766 1674 3 902 3 808 3 717 3,630 3 546 3 465 3 387 3312 3 240 3 170 3 037 2 914 2 798 2 690 2 589 2 404 2 241 2 096 1966 4 853 4 713 4 580 4 452 4 329 4212 4 100 3 993 3 890 3 791 3 605 3 433 3 274 3 127 2991 2 745 2 532 2345 2 181 6 7 8 9 10 5 795 5 601 5 417 5 242 5 076 4 917 4 766 4 623 4 486 4 355 4 111 3 889 3 685 3 498 3 326 3 020 2 759 2 534 2 399 6 728 6 472 6 230 6 002 5 786 5 582 5 389 5 206 5 033 4 868 4 564 4 288 4,039 3 812 3 605 3 242 2 937 2 678 2 455 7 652 7325 7 020 6 733 6 463 6 210 5 971 5 7475 535 5 335 4 968 4,639 4 344 4 078 3 837 3 421 3 076 2 786 2 540 8 566 8 1627 786 7 435 7108 6,802 6 515 6 247 5 985 5 759 5 328 4 946 4,607 4,303 4 031 3 566 3 184 2 868 2603 9 471 8 983 8 530 8 111 7722 7360 7 024 6 710 6 418 6 145 5 650 5 216 4 833 4 494 4 193 3 682 3 269 2 930 2 650 11 12 13 14 15 10 368 9 787 9 253 8 760 8 306 7 887 7 499 7 139 6 805 6 495 5 988 5 453 5 029 4 656 4 327 3 776 3 335 2978 2 683 11 255 10 575 9 954 9 385 8 863 8 384 7943 7 536 7161 6 814 6 194 5 660 5 197 4 793 4 439 3 851 3 387 3 013 2 708 12 134 11 348 10 635 9 986 9 394 8 534 8 358 7904 7487 7 103 6 424 5 842 5 342 4910 4 533 3 912 3 427 3 040 2727 13,004 12 106 11 296 10 563 9 899 9 295 8 745 8 244 7786 7367 6,628 6 002 5 468 5 008 4 611 3 962 3 459 3 061 2 740 13 865 12 849 11 938 11 118 10 380 9 712 9 108 8 559 8,060 7606 6 811 6 142 5 575 5,092 4 675 4 001 3 483 3,076 2 750 16 17 18 19 20 14 718 13 578 12 561 11 652 10 838 10 106 9,447 8 851 8 312 7 824 6 974 6 265 5 669 5 162 4 730 4 003 3 503 3 088 2 758 15 562 14 292 13 166 12 166 11 274 10 477 9763 9 122 8,544 8 002 7 120 6 373 5 749 5 222 4 775 4 059 3 518 3,097 2 763 16 398 14992 13 754 12 659 11690 10 828 10 059 9 372 8 756 8 2017 250 6 467 5 818 5 273 4 812 4 080 3 529 3 104 2 767 17 226 15 678 14,324 13 134 12 085 11 158 10 336 9 604 8 950 8 365 2366 6550 5 877 5 3164 844 4 097 3 539 3 109 2 770 18 046 16 351 14 877 13 590 12 462 11 470 10 594 9 818 9 128 8 514 7 469 6 623 5 929 5353 4 870 4 110 3 546 3 113 2 772 25 22 023 19 523 17413 15 622 14,094 12 783 11 654 10 675 9 823 9 077 7 843 6 873 6 097 5 467 4 948 4 147 3 564 3 122 2 776 30 25 808 22937 19 600 12292 15 373 13 765 12 409 11 258 10 274 9 427 8 055 7 003 6 177 5 517 4 9794 160 3 569 3 124 2 778 c  If the cost of capital were to increase to 10 percent, which investment(s) should the firm make  Use a minus sign to enter negative values, if any, Round your answers for the net present values to the nearest dollar and for internal rates of return to the nearest whole number Net present values  Investment A  $ Investment B  $ Internal rates of return Investment A  9 Investment B  The firm should make elect

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A firm has two possible investments with the following cash inflows. Each investment costs $510, and the cost of capital is eight percent. Use Appendix

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