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EX12-2: Evaluating pr One point per highlighted answer. 8+2 bonus =10 Fitch Industries is in the process of choosing the better of two equal-risk, mutually
EX12-2: Evaluating pr One point per highlighted answer. 8+2 bonus =10 Fitch Industries is in the process of choosing the better of two equal-risk, mutually exclusive capital expenditure projects A and B. The relevant cash flows for each project are shown in the following table. The firm's cost of capital is 5%. Please answer the questions below. Round your answers to two decimal places. a. Calculate the NPV of the two projects. Which project you should choose based on NPV? A: B: b. Calculate the IRR of the two projects. Which project you should choose based on IRR? A: B: c. Calculate the two projects' payback period. Which project you should choose based on the payback period? A: B: d. Calculate the ROI of the two projects. Which project you should choose based on ROI? A: B: EX12-2: Evaluating pr One point per highlighted answer. 8+2 bonus =10 Fitch Industries is in the process of choosing the better of two equal-risk, mutually exclusive capital expenditure projects A and B. The relevant cash flows for each project are shown in the following table. The firm's cost of capital is 5%. Please answer the questions below. Round your answers to two decimal places. a. Calculate the NPV of the two projects. Which project you should choose based on NPV? A: B: b. Calculate the IRR of the two projects. Which project you should choose based on IRR? A: B: c. Calculate the two projects' payback period. Which project you should choose based on the payback period? A: B: d. Calculate the ROI of the two projects. Which project you should choose based on ROI? A: B
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