Question
Maxwell Software, Inc., has the following mutually exclusive projects. Year Project A Project B 0 $16,000 $19,000 1 10,000 11,000 2 6,500 7,500 3 2,500
Maxwell Software, Inc., has the following mutually exclusive projects. |
Year |
| Project A |
| Project B |
0 |
| $16,000 |
| $19,000 |
1 |
| 10,000 |
| 11,000 |
2 |
| 6,500 |
| 7,500 |
3 |
| 2,500 |
| 6,500 |
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.) |
| Payback period |
Project A | years |
Project B | years |
a-2. | Which, if either, of these projects should be chosen? | ||||||||
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| ||||||||
|
|
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.) |
| NPV |
Project A | $ |
Project B | $ |
b-2. | Which, if either, of these projects should be chosen if the appropriate discount rate is 16 percent? | ||||||||
|
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|
Ref
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