Question
Britney Javelin Company is considering two investments, both of which cost $15,000. The cash flows are as follows: Use Appendix B and Appendix D. Year
Britney Javelin Company is considering two investments, both of which cost $15,000. The cash flows are as follows: Use Appendix B and Appendix D.
Year | Project A | Project B | ||||
1 | $8,100 | $6,750 | ||||
2 | 5,400 | 4,050 | ||||
3 | 4,050 | 10,800 | ||||
a. Calculate the payback period for project A and project B. (Round the final answers to 2 decimal places.)
Payback period | |||
Project A | years | ||
Project B | years | ||
b-1. Calculate the NPV for project A and project B. Assume a cost of capital of 7 percent. (Round "PV Factor" to 3 decimal places. Round the intermediate and final answers to the nearest whole dollar.)
Net present value | |
Project A | $ |
Project B | $ |
b-2. Which of the two projects should be chosen based on the NPV method?
multiple choice 1
Project A
Project B
Both
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