Question
The treasurer of Amaro Canned Fruits Inc. has projected the cash flows of projects A, B, and C as follows: Year Project A Project B
The treasurer of Amaro Canned Fruits Inc. has projected the cash flows of projects A, B, and C as follows:
| Year | Project A | Project B | Project C | |||
| 0 | $ | 220,000 | $ | 381,000 | $ | 220,000 |
| 1 | 141,000 | 232,000 | 154,000 | |||
| 2 | 141,000 | 232,000 | 121,000 | |||
Suppose the relevant discount rate is 8 percent a year.
a. Compute the PI for each of the three projects. (Do not round intermediate calculations. Round the answers to 2 decimal places.)
| Profitability Index | |
| Project A | |
| Project B | |
| Project C | |
b. Compute the NPV for each of the three projects. (Do not round intermediate calculations. Round the answers to 2 decimal places. Omit $ sign in your response.)
| NPV | |
| Project A | $ |
| Project B | $ |
| Project C | $ |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Exploring The Trust And Innovation Mechanisms In M And A Of Chinas State Owned Enterprises With Mixed Ownership
Authors: Yan Wang
1st Edition
9811644039,9811644047
