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Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $219,480 $15,584 1 27,800 5,592 2 55,000 8,100 3 58,000
Consider the following two mutually exclusive projects: |
Year | Cash Flow (A) | Cash Flow (B) |
0 | $219,480 | $15,584 |
1 | 27,800 | 5,592 |
2 | 55,000 | 8,100 |
3 | 58,000 | 13,887 |
4 | 430,000 | 8,206 |
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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