Question
Project B has the following cash flows: (remember the year zero number is negative) Year 0 Year 1 Year 2Year 3Year 4 Cash flows-$1,000,000$600,000$400,000$300,000$200,000 1.Using
Project B has the following cash flows: (remember the year zero number is negative)
Year 0 Year 1 Year 2Year 3Year 4
Cash flows-$1,000,000$600,000$400,000$300,000$200,000
1.Using a 9% cost of capital, what is the net present value of this project? Should this project be accepted?
2.What is the profitability index for this project?
3.What is the internal rate of return for this project?
4.What is the payback period for this project?
5.What is the present value payback period for this project?
Project E has the following cash flows: (remember the year zero number is negative)
Year 0 Year 1 Year 2Year 3Year 4
Cash flows-$1,000,000$300,000$400,000$500,000$500,000
6.Using a 9% cost of capital, what is the net present value of this project? Assume that Project E is mutually exclusive to Project B above.Using net present value to make the decision -- should this project be accepted over Project B?
7.Using a 9% cost of capital, what is the profitability index for this project? Assume that Project E is mutually exclusive to Project B above.Using the profitability decision model to make the decision -- should this project be accepted over Project B?
8.Using a 9% cost of capital, what is the internal rate of return for this project? Assume that Project E is mutually exclusive to Project B above.Using the internal rate of return decision model to make the decision -- should this project be accepted over Project B?
9.Using a 9% cost of capital, what is the payback period for this project? Assume that Project E is mutually exclusive to Project B above.Using the payback decision model to make the decision -- should this project be accepted over Project B?
10.Using a 9% cost of capital, what is the present value payback period for this project? Assume that Project E is mutually exclusive to Project B above.Using the present value payback decision model to make the decision -- should this project be accepted over Project B?
11.Which project should be selected?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started