Question
Dahlia Manufacturing has the following two possible projects. The required return is 13 percent. Year Project Y Project Z 0 $28,600 $51,000 1 14,600 14,000
| Dahlia Manufacturing has the following two possible projects. The required return is 13 percent. |
| Year | Project Y | Project Z |
| 0 | $28,600 | $51,000 |
| 1 | 14,600 | 14,000 |
| 2 | 13,000 | 37,000 |
| 3 | 15,400 | 12,000 |
| 4 | 11,000 | 35,000 |
| Required: | |
| (a) | What is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 3 decimal places (e.g., 32.161).) |
| Profitability index | |
| Project Y | |
| Project Z | |
| (b) | What is the NPV for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) |
| NPV | |
| Project Y | $ |
| Project Z | $ |
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A First Course in Quantitative Finance
Authors: Thomas Mazzoni
1st edition
9781108411431, 978-1108419574
