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please round all numbers to two decimal places. Thank you! Initial investment Outcome Pessimistic Most likely Optimistic Project A Project B $12,400 $12,400 Annual cash
please round all numbers to two decimal places. Thank you!
Initial investment Outcome Pessimistic Most likely Optimistic Project A Project B $12,400 $12,400 Annual cash inflows (CF) $830 $1,540 1,610 1,610 2,500 1,750 a. Determine the range of annual cash inflows for each of the two projects. b. Assume that the firm's cost of capital is 10.9% and that both projects have 18-year lives. Construct a table showing the NPVs for each project for each of the possible outcomes. Include the range of NPVs for each project. c. Do parts (a) and (b) provide consistent views of the two projects? Explain. d. Which project do you recommend? Why? a. The range of annual cash inflows for project A is $ . (Round to the nearest dollar.) Initial investment Outcome Pessimistic Most likely Optimistic Project A Project B $12,400 $12,400 Annual cash inflows (CF) $830 $1,540 1,610 1,610 2,500 1,750 a. Determine the range of annual cash inflows for each of the two projects. b. Assume that the firm's cost of capital is 10.9% and that both projects have 18-year lives. Construct a table showing the NPVs for each project for each of the possible outcomes. Include the range of NPVs for each project. c. Do parts (a) and (b) provide consistent views of the two projects? Explain. d. Which project do you recommend? Why? a. The range of annual cash inflows for project A is $ . (Round to the nearest dollar.)Step by Step Solution
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