Question: Janina, Incorporated, has the following mutually exclusive projects. Year Project A Project B 0 $ 18,000 $ 21,000 1 11,000 12,000 2 7,500 8,500 3
| Janina, Incorporated, has the following mutually exclusive projects. |
| Year | Project A | Project B |
|---|---|---|
| 0 | $ 18,000 | $ 21,000 |
| 1 | 11,000 | 12,000 |
| 2 | 7,500 | 8,500 |
| 3 | 2,700 | 7,500 |
| a-1. | Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) |
| a-2. | If the company's payback period is two years, which, if either, of these projects should be chosen? |
| multiple choice 1 Project A Project B Both projects Neither project |
| b-1. | What is the NPV for each project if the appropriate discount rate is 16 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| b-2. | Which, if either, of these projects should be chosen if the appropriate discount rate is 16 percent? |
| multiple choice 2 Project A Project B Both projects Neither project |
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts