eBook Problem 22-11 Investments Quick and Slow cost $1,000 each, are mutually exclusive, and have the following cash flows. The firms cost of capital is 12 percent. | Cash Inflows | | Q | S | Year 1 | | $1,200 | | $357 | | 2 | | | | 357 | | 3 | | | | 357 | | 4 | | | | 357 | | - According to the net present value method of capital budgeting, which investment(s) should the firm make? Use Appendix B and Appendix D to answer the question. Use a minus sign to enter negative values, if any. Round your answers to the nearest cent.
NPV (Investment Quick): $ NPV (Investment Slow): $ The firm should make investment(s) -Select-QuickSlowQuick and SlowItem 3 . - According to the internal rate of return method of capital budgeting, which investment(s) should the firm make? Use Appendix D to answer the question. Round your answers to the nearest whole number.
IRR (Investment Quick): % IRR (Investment Slow): % The firm should make investment(s) -Select-QuickSlowQuick and SlowItem 6 . - If Q is chosen, the $1,200 can be reinvested and earn 14 percent. Does this information alter your conclusions concerning investing in Q and S? To answer, assume that Ss cash flows can be reinvested at its internal rate of return. Use the rounded internal rate of return from part b. Use Appendix A and Appendix C to answer the question. Round your answers to the nearest cent.
Terminal value (Investment Quick): $ Terminal value (Investment Slow): $ The firm should make investment(s) -Select-QuickSlowQuick and SlowItem 9 . Would your answer be different if Ss cash flows were reinvested at the cost of capital (12 percent)? Use Appendix C to answer the question. Round your answer to the nearest cent. Terminal value (Investment Slow): $ The firm should make investment(s) -Select-QuickSlowQuick and SlowItem 11 . appendix d appendix b appendix a appendix c |