Consider the following mutually exclusive projects: Cash flows Project Co C C C C G A...
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Consider the following mutually exclusive projects: Cash flows Project Co C C C C G A -80,000 100,000 0 0 0 0 B -80,000 30,000 30,000 30,000 30,000 0 C -80,000 20,000 20,000 20,000 20,000 20,000 (a) What is the payback period for each project? (b) Which project is preferred according to the NPV criterion if the discount rate is 8%? (c) How would the the answer to (a) change if the discount rate was 5% ? (d) What is the Internal Rate of Return (IRR) for each project? Use the editor to format your answer Consider the following mutually exclusive projects: Cash flows Project Co C C C C G A -80,000 100,000 0 0 0 0 B -80,000 30,000 30,000 30,000 30,000 0 C -80,000 20,000 20,000 20,000 20,000 20,000 (a) What is the payback period for each project? (b) Which project is preferred according to the NPV criterion if the discount rate is 8%? (c) How would the the answer to (a) change if the discount rate was 5% ? (d) What is the Internal Rate of Return (IRR) for each project? Use the editor to format your answer
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a Payback Period Project A Payback period Initial investment Annual cash flow 80000 30000 267 years ... View the full answer
Related Book For
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
Posted Date:
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