Question
Consider projects A and B with the following cash flows: C 0 C 1 C 2 C 3 A $ 27 + $ 16 +
Consider projects A and B with the following cash flows:
| C0 | C1 | C2 | C3 | ||||||||||||||||||||
| A | $ | 27 | + | $ | 16 | + | $ | 16 | + | $ | 16 | ||||||||||||
| B | 52 | + | 27 | + | 27 | + | 27 | ||||||||||||||||
a-1. What is the NPV of each project if the discount rate is 10%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
a-2. Which project has the higher NPV?
b-1. What is the profitability index of each project? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
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Management Accounting
Authors: John Burns, Martin Quinn, Liz Warren, João Oliveira
1st Edition
0077121619, 978-0077121617
