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Please help with questions A-C Payback and NPV Neil Corporation has three projects under consideration. The cash flows for each of them are shown in
Please help with questions A-C
Payback and NPV Neil Corporation has three projects under consideration. The cash flows for each of them are shown in the following table: The firm has a cost of capital of 15%. a. Calculate each project's payback period. Which project is preferred according to this method? b. Calculate each project's net present value (NPV). Which project is preferred according to this method? e. Comment on your findings in parts a and b, and recommend the best project. Explain your recommendation. B. Project B OC. Project A Data Table b. The NPV of project Ais (Round to the nearest cent.) The NPV of project B is $ 7. (Round to the nearest cent.) (Click on the icon located on the top-right corner of the dala table below in order to copy its contents into a spreadsheet.) The NPV of project C is S (Round to the nearest cent.) Project A $40,000 Project C $40,000 Initial investment (CF) Year (0) According to the NPV method, which project should the firm choose? (Select the best answer below.) 1 O A. Project C OB. Project B O C. Project A Project B $40,000 Cash inflows (CF) $6,000 $10,000 $14,000 $18,000 $22,000 $14,000 $14,000 $14,000 $14.000 $14.000 2 3 4 5 $22,000 $18,000 $14,000 $10,000 $6,000 C. Comment on your findings in parts a and b, and recommend the best project. Explain your recommendation. (Select the best a Print Dane O A Project C is the best project because it has the highest NPV. OB. Project A is the best project because it has the lowest NPV. OC. Project B is the best project because it has the most realistic NPV. Payback and NPV Neil Corporation has three projects under consideration. The cash flows for each of them are shown in the following table: B. The fim has a cost of capital of 15%. a. Calculate each project's payback period. Which project is preferred according to this method? b. Calculate each project's net present value (NPV). Which project is preferred according to this method? c. Comment on your findings in parts a and b, and recommend the best project. Explain your recommendation. Data Table a. The payback period of project Ais years. (Round to two decimal places.) The payback period of project B is years. (Round to two decimal places.) The payback period of project Cis years. (Round to two decimal places.) According to the payback method, which project should the firm choose? (Select the best answer below.) (Click on the icon located on the top-right comer of the data table below in order to copy its contents into a spreadsheet.) Project A $40,000 O A. Project C OB. Project B OC. Project A Initial Investment (CF) Year (0) $6,000 Project B Project C $40,000 $40,000 Cash Inflows (CF) $22,000 $10.000 $18,000 $14,000 $14,000 $18.000 $10,000 $22,000 $6,000 1 2 3 4 5 b. The NPV of project A is $. (Round to the nearest cent.) $14,000 $14,000 $14,000 $14,000 $14,000 The NPV of project B is $1(Round to the nearest cent.) The NPV of project C is $(Round to the nearest cent.) Print Done According to the NPV method, which project should the firm choose? (Select the best answer below.) O A. Project C OB. Project BStep by Step Solution
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