Question
Maxwell Software, Inc., has the following mutually exclusive projects. Year Project A Project B 0 $29,000 $32,000 1 16,500 17,500 2 13,000 11,500 3 3,800
| Maxwell Software, Inc., has the following mutually exclusive projects. |
| Year | Project A | Project B | ||
| 0 | $29,000 | $32,000 | ||
| 1 | 16,500 | 17,500 | ||
| 2 | 13,000 | 11,500 | ||
| 3 | 3,800 | 13,000 |
| 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.) |
| Payback period | |
| Project A | years |
| Project B | years |
| a-2. | Which, if either, of these projects should be chosen? | ||||
|
| b-1. | What is the NPV for each project if the appropriate discount rate is 14 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.) |
| NPV | |
| Project A | $ |
| Project B | $ |
| b-2. | Which, if either, of these projects should be chosen if the appropriate discount rate is 14 percent? | ||||
|
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Fundamentals of Investments, Valuation and Management
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
8th edition
1259720697, 1259720691, 1260109437, 9781260109436, 978-1259720697
