Question
Maxwell Software, Inc., has the following mutually exclusive projects Year Project A Project B 0 -$23,000 -$26,000 1 13,500 14,500 2 10,000 11,000 3 3,200
Maxwell Software, Inc., has the following mutually exclusive projects
Year Project A Project B
0 -$23,000 -$26,000
1 13,500 14,500
2 10,000 11,000
3 3,200 10,000
a-1. Calculate the payback period for each project.
Payback period
Project A years
Project B years
a-2. Which, if either, of these projects should be chosen? 1. Project A 2. Project B 3. Both Projects 4. Neither project
b-1. What is the NPV for each project if the appropriate discount rate is 17 percent?
NPV
Project A $
Project B $
b-2. Which, if either, of these projects should be chosen if the appropriate discount rate is 17 percent? 1. Project A 2. Project B 3. Both projects 4. Neither project
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