Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

attached our only 2 questions related to npvplease help with the following . A firm has a WACC of 9% and is deciding between two

image text in transcribed

attached our only 2 questions related to npvplease help with the following .

image text in transcribed A firm has a WACC of 9% and is deciding between two mutually exclusive projects. Project A has an initial investment of $63. The additional cash flows for project A are: year 1 = $17, year 2 = $39, year 3 = $43. Project B has an initial investment of $74.The cash flows for project B are: year 1 = $59, year 2 = $35, year 3 = $30. Calculate the payback and NPV for each project. (Show all answers to 2 decimals. Round your answer to the nearest 2 decimal places. DO NOT round until after all calculations have been completed and you have reached your final answer. If your answer ends in a zero, only include 1 decimal place and omit the zero. If the answer ends in two zeros after rounding, do not use any decimal places as software does not recognize the ".00" endings and will remove points from your score.) Payback for A = ________ Payback for B = __________ NPV for A = ___________ NPV for B = _____________ 2. Project Z has an initial investment of $51,000. The project is expected to have cash inflows of $27,000 at the end of each year for the next 15 years. The corporation has a WACC of 9%. Calculate the NPV for project Z. NPV (nearest dollar) = ______________

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles of Managerial Finance

Authors: Chad J. Zutter, Scott B. Smart

15th edition

013447631X, 134476315, 9780134478197 , 978-0134476315

More Books

Students also viewed these Finance questions

Question

Will the company help with relocation expenses?

Answered: 1 week ago