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Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $ 237,692 $ 15,912 1 27,000 5,615 2 58,000 8,966
| Consider the following two mutually exclusive projects: |
| Year | Cash Flow (A) | Cash Flow (B) |
|---|---|---|
| 0 | $ 237,692 | $ 15,912 |
| 1 | 27,000 | 5,615 |
| 2 | 58,000 | 8,966 |
| 3 | 55,000 | 13,256 |
| 4 | 416,000 | 8,572 |
| Whichever project you choose, if any, you require a 6 percent return on your investment. |
| a. What is the payback period for Project A? |
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| b. What is the payback period for Project B? |
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| c. What is the discounted payback period for Project A? |
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| d. What is the discounted payback period for Project B? |
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| e. What is the NPV for Project A? |
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| f. What is the NPV for Project B ? |
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| g. What is the IRR for Project A? |
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| h. What is the IRR for Project B? |
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| i. What is the profitability index for Project A? |
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| j. What is the profitability index for Project B? |
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Finance Online Case Library
Authors: Eugene F. Brigham
1st Edition
0324275218, 9780324275216
