Question
Sunrise Corporation has the following independent projects available. Both projects require an initial investment of $1,300,000. The two projects are equally risky, and the required
Sunrise Corporation has the following independent projects available. Both projects require an initial investment of $1,300,000. The two projects are equally risky, and the required rate of return is 13%. The estimated after tax cash flows for the projects are shown below:
Year | Project A | Project B | |
1 | $560,000.00 | $350,000.00 | |
2 | $490,000.00 | $420,000.00 | |
3 | $420,000.00 | $420,000.00 | |
4 | $245,000.00 | $420,000.00 | |
5 | $140,000.00 | $420,000.00 |
Please answer with two digits to the right of the decimal.
For example, 20.20% or 2.02 Times.
- Calculate the Net Present Values (NPVs) of each project.
- Calculate the Internal Rates of Returns (IRRs) of each project. Please express your answer in percent, with two digits to the right of the decimal.
- Calculate the Profitability Indexes (PIs) of each project. Please express your answer with two digits to the right of the decimal.
- Which project(s) if any, would you select? Why?
PLEASE SHOW ALL WORK/KEYSTROKES
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