Q4

The following are the cash flows of two projects: Year Project A Project B $ (240) $ (240) 120 140 120 140 OWNP 120 140 120 What is the payback period of each project? (Round your answers to 1 decimal place.) Project Payback Period A years B yearsA project that costs $3,900 to install will provide annual cash flows of $1,250 for each of the next 6 years. a. What is NPV if the discount rate is 13%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) NPV b. How high can the discount rate be before you would reject the project? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Discount rateA new computer system will require an initial outlay of $17,500, but it will increase the firm's cash flows by $3,500 a year for each of the next 8 years. a. Calculate the NPV and decide if the system is worth installing if the required rate of return is 9%. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) Net present value Worth installing