Question 1- NPV,with rankings Botany Bay, Inc., a maker of casual clothing, is considering four projects shown in the following table,. Because of past financial difficulties, the company has a high cost of capital at 14.3%.

a.Calculate the NPV of each project, using a cost of capital of 14.3%.

b.Rank acceptable projects by NPV.

c.Calculate the IRR of each project and use it to determine the highest cost of capital at which all of the projects would be acceptable.

spreadsheet.)

Project A

Project B

Project C

Project D

Initial investment

(CF 0CF0)

$49,100

$99,000

$80,400

$179,200

Year

(t)

Cash inflows

(CF Subscript tCFt)

1

$19,500

$35,200

$19,700

$99,400

2

$19,500

$50,100

$41,000

$79,100

3

$19,500

$51,200

$59,400

$59,700

Question 2- Cooper Electronics uses NPV profiles to visually evaluate competing projects. Key data for the two projects under consideration are given in the following table: Using these data, graph, on the same set of axes, the NPV profiles for each project using discount rates of 0%, 8%, and the IRR.

a spreadsheet.)

Terra

Firma

Initial investment

$31,000

$27,000

Year

Operating cash inflows

1

$10,000

$7,000

2

$11,000

$9,000

3

$12,000

$8,000

4

$7,000

$12,000

Question 2- NPV,with rankings Botany Bay, Inc., a maker of casual clothing, is considering four projects shown in the following table,. Because of past financial difficulties, the company has a high cost of capital at 14.3%.

a.Calculate the NPV of each project, using a cost of capital of 14.3%.

b.Rank acceptable projects by NPV.

c.Calculate the IRR of each project and use it to determine the highest cost of capital at which all of the projects would be acceptable.

spreadsheet.)

Project A

Project B

Project C

Project D

Initial investment

(CF 0CF0)

$49,100

$99,000

$80,400

$179,200

Year

(t)

Cash inflows

(CF Subscript tCFt)

1

$19,500

$35,200

$19,700

$99,400

2

$19,500

$50,100

$41,000

$79,100

3

$19,500

$51,200

$59,400

$59,700