Question
Maxwell Software, Inc., has the following mutually exclusive projects. Year Project A Project B 0 $34,000 $37,000 1 19,000 20,000 2 15,500 14,000 3 4,300
Maxwell Software, Inc., has the following mutually exclusive projects. |
Year | Project A | Project B | ||
0 | $34,000 | $37,000 | ||
1 | 19,000 | 20,000 | ||
2 | 15,500 | 14,000 | ||
3 | 4,300 | 15,500 | ||
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? | ||||||||
|
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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