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Struggling with this HW question... explain how you got the answer please and thank you!! Consider the following two mutually exclusive projects: Year 0 1
Struggling with this HW question... explain how you got the answer please and thank you!!
Consider the following two mutually exclusive projects: Year 0 1 2 3 4 Cash Flow (A) Cash Flow (B) -$40,000 -$180,000 25,000 15,000 22,000 45,000 20,000 50,000 15,000 275,000 The required return on these investments is 11 percent. Required: (a) What is the payback period for each project? (Do not round in calculations. Round your answers to 2 decimal places (e.g., 32.16).) Project A Project B Payback period years years (b) What is the NPV for each project? (Do not round intermediate calculation your answers to 2 decimal places (e.g.,32.16).) Project A Project B Net present value $ $ (b) What is the NPV for each project? (Do not round intermediate calculations. F your answers to 2 decimal places (e.g.,32.16).) Net present value Project A Project B Ata (c) What is the IRR for each project? (Do not round intermediate calculations. E your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Project A Project B Internal rate of return % % (d)What is the profitability index for each project? (Do not round intermedi calculations. Round your answers to 3 decimal places (e.g., 32.161).) Profitability index Project A Project B (e)Based on your answers in (a) through (d), which project will you finally choose? (Click to select) Step by Step Solution
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