Question
PLEASE YOU HELP WITH SHORT ANSWERS 1-Project A costs $100,000 upfront and has an NPV of $10,000. project B costs $150,000 upfront and has an
PLEASE YOU HELP WITH SHORT ANSWERS
1-Project A costs $100,000 upfront and has an NPV of $10,000. project B costs $150,000 upfront and has an NPV of $11,000. Which project do you chose if they are mutually exclusive? which project or projects do you chose if they are independent and the company has $250,000 to spend on capital budgeting projects?
2-Project A is as follows: $100,000 upfront cost and annual cash flows of $25,000 a year for seven years.
Project B is as follows: $100,000 upfront cost and cash flow of $20,000 per year for 8 years. what are the payback periods for projects A and B?
3-The IRR of project X is 18%. The IRR of project Y is 17%. The company's cost of capital (cost of accessing funds to finance the projects) is 10%. If projects X and Y are independent and the company has enough funds to do both, which project (s) should they chose? If they are mutually exclusive, which do you chose?
4-a project costs $500,000 upfront and has the following cash flows:
year 1. $100,000
year 2. $200,000
year 3. $300,000
year 4. $450,000
year 5. $550,000
Calculate the NPV using an 11% discount rate. If this project is independent of other projects the company is considering and the firm has enough funds, should this project be accepted?
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