Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer ASAP! please bold or circle answers! All techniques-Decision among mutually exclusive investments Pound Industries is attempting to select the best of three mutually

image text in transcribed
image text in transcribed
Please answer ASAP!
please bold or circle answers!
All techniques-Decision among mutually exclusive investments Pound Industries is attempting to select the best of three mutually exclusive projects. The initial investment and after-tax cash inflows associated with these projects are shown in the following table. Cash flows Project A Project B Project C Initial investment (CF) $140,000 $180,000 $170,000 Cash inflows (CF), t = 1 to 5 $45,000 $56,000 $56,500 a. Calculate the payback period for each project. b. Calculate the net present value (NPV) of each project, assuming that the firm has a cost of capital equal to 11% c. Calculate the internal rate of return (IRR) for each project. d. Indicate which project you would recommend. a. The payback period of project Ais years. (Round to two decimal places.) The payback period of project Bis years. (Round to two decimal places.) The payback period of project Cis years. (Round to two decimal places.) b. The NPV of project is $. (Round to the nearest cent.) The NPV of project Bis $. (Round to the nearest cent.) The NPV of project is $ (Round to the nearest cent.) c. The IRR of project Ais%. (Round to two decimal places.) Click to select your answer(s). Cash flows All techniques-Decision among mutually exclusive investments Pound Industries is attempting to select the best of three mutually exclus initial investment and after-tax cash inflows associated with these projects are shown in the following table. Project A Project B Project C Initial investment (CF) $140,000 $180,000 $170,000 Cash inflows (CF), t = 1 to 5 $45,000 $56,000 $56,500 a. Calculate the payback period for each project. b. Calculate the net present value (NPV) of each project, assuming that the firm has a cost of capital equal to 11%. c. Calculate the internal rate of return (IRR) for each project. d. Indicate which project you would recommend. c. The IRR of project A is % (Round to two decimal places.) The IRR of project Bis %. (Round to two decimal places.) The IRR of project is % (Round to two decimal places.) d. Which project would you recommend? (Select the best answer below.) O A. Project C B. Project A C. Project B

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Theory And Practice

Authors: Prasanna Chandra

8th Edition

0071078401, 978-0071078405

More Books

Students also viewed these Finance questions

Question

Explain why many households do not participate in the stock market.

Answered: 1 week ago