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Project B has the following cash flows: (remember the year zero number is negative) Year 0 Year 1 Year 2 Year 3 Year 4 Cash
Project B has the following cash flows: (remember the year zero number is negative) Year 0 Year 1 Year 2 Year 3 Year 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? Eddie Corporation has a project with the following cash flows: (remember the year zero | number is negative) Year 0 Year 1 Year 2 Year 3 Year 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 index method 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 method 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 method 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 present value payback method to make the decision -- should this project be accepted over Project B? 11. Which project should be selected
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