Question
Answer Fast Please (No Need for details step just the results) The Chief Financial Officer of Dana Co. should make capital budgeting decisions using the
Answer Fast Please (No Need for details step just the results)
The Chief Financial Officer of Dana Co. should make capital budgeting decisions using the attached table to select one project (A or B).
Answer the following questions to help the CFO making the most appropriate decision.
Year | Cash Flow (A) | Cash Flow (B) | Discount Factor | ||
0 | $ (61,500) | $ (73,500) | 1 | ||
1 | $ 38,000 | $ 50,000 | 0.8696 | ||
2 | $ 24,000 | $ 28,000 | 0.7561 | ||
3 | $ 12,000 | $ 26,000 | 0.6575 | ||
Discount rate | 15% | ||||
1) The Present Value of project A inflows is :
2) The Net Present Value (NPV) of project A is :
3) The Present Value of project B inflows is :
4) The Net Present Value (NPV) of project B is :
5) Using NPV criteria, project A is accepted or rejected
6) Using NPV criteria, project B is accepted or rejected
7) Using NPV criteria, project A is better than B (True, False)
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