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Q 31 -36: Consider the following cash flows (in $ millions) for a project. You require an 8% return: Year Project A Project B -3501
Q 31 -36: Consider the following cash flows (in $ millions) for a project. You require an 8% return: Year Project A Project B -3501 -6000 125 250 150 100 250 100 50 350 What is original payment in project A? O A. -$225 O B. -$350 O C. $480 QUESTION 32 How would you calculate the present value of the year 4 cash flow in project A? O A. $50 x ((1+.08)^4) O B. ($50 - $350 / $350) o C.$50 / ((1+.08)^4) QUESTION 33 What is the present value of the cash flows from years 1-4 from Project A? O A. $480 OB. $225 O C. $130 QUESTION 34 What is the net present value of Project A? O A. -$23 OB. $54 o C. $130 QUESTION 35 Using the NPV criterion, would you invest in project A? O A. No O B. Yes o C. Insufficient information QUESTION 36 If the projects are mutually exclusive and based on the IRR criterion, which project would you accept? A. Both O B. Project A O C. Neither
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