Question
The treasurer of Orient Express, Inc., has projected the cash flows of projects A, B, and C as follows. Suppose the relevant discount rate is
- The treasurer of Orient Express, Inc., has projected the cash flows of projects A, B, and C as follows. Suppose the relevant discount rate is 12 percent a year. (3M+3M+2M)
| Year | Project A | Project B | Project C |
| 0 | (100,000) | (200,000) | (100,000) |
| 1 | 70,000 | 130,000 | 75000 |
| 2 | 70,000 | 130,000 | 60,000 |
- Compute the NPVs for each of the three projects.
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- Compute the profitability indices for each of the three projects.
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- Suppose these three projects are independent. Which projects should the treasurer accept based on the NPV and profitability index rule?
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Bitcoin A Game Theoretic Analysis
Authors: Micah Warren
1st Edition
3110772833, 978-3110772838
