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NPV, with rankings Botany Bay, Inc., a maker of casual clothing, is considering four projects shown in the following table. Because Because of past financial
NPV, with rankings Botany Bay, Inc., a maker of casual clothing, is considering four projects shown in the following table. Because Because of past financial difficulties, the company has a high cost of capital at 14.8%. a. Calculate the NPV of each project, using a cost of capital of 14.8%. b. Rank acceptable projects by NPV. c. Calculate the IRR of each project and use it to determine the highest cost of capital at which all of the projects would be acceptable. a. Calculate the NPV of each project, using a cost of capital of 14.8% The NPV of project Ais $. (Round to the nearest cent.) Data Table Is project A acceptable? (Select the best answer below.) OA. Yes OB. No (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) The NPV of project B is S (Round to the nearest cent.) Is project B acceptable? (Select the best answer below.) Project A $49,800 Project D $179,900 Initial investment (CF) Year (0) Project B Project C $100,800 $79,500 Cash inflows (CF) $36,700 $20,500 $51,900 $39,100 $51,300 $59,400 1 OA. Yes 2 3 $20,200 $20,200 $20.200 $100,400 $79,000 $59,500 OB. No The NPV of project C is $ (Round to the nearest cent.) Print Done Is project C acceptable? (Select the best answer below.) O A. Yes OB. No Click to select your answer(s). The NPV of project D is $ (Round to the nearest cent.) Is project D acceptable? (Select the best answer below.) A. Yes B. No b. Rank acceptable projects by NPV. is ranked number 1. (Select from the drop-down menu.) is ranked number 2. (Select from the drop-down menu.) is ranked number 3. (Select from the drop-down menu.) c. Calculate the IRR of each project and use it to determine the highest cost of capital at which all of the projects would be acceptable. The IRR of project A is %. (Round to two decimal places.) The IRR of project B is %. (Round to two decimal places.) The IRR of proiect C is % (Round to two decimal places) Click to select your answer(s). c. Calculate the IRR of each project and use it to determine the highest cost of capital at which all of the projects would be acceptable. The IRR of project A is %. (Round to two decimal places.) The IRR of project B is %. (Round to two decimal places.) The IRR of project C is %. (Round to two decimal places.) The IRR of project D is %. (Round to two decimal places.) What is the highest cost of capital at which all of the projects would be acceptable? (Choose the correct answer.) A. 19.39% B. 17.29% C. 10.49% OD. 17.30%
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