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To receive partial credit, you need to show relevant work for all numerical questions (the steps for solutions) Al-Alis firm is considering two projects and

To receive partial credit, you need to show relevant work for all numerical questions (the steps for solutions)

Al-Alis firm is considering two projects and the cash flows associated with them are shown in the following table. The firm has set its cost of capital at 11 %

Year

Project A

Project B

0

- SR 200

- SR 200

1

80

100

2

80

100

3

80

100

4

80

1- What is the payback period (PBP) for each project?

Project A

Project B

Payback period (PBP)

2- Calculate the NPV for each project?

Project A

Project B

NPV

3- What is the IRR for each project ? ( to help you in calculating the IRR for project A is located between 21% & 22 % and for project B is between 23% & 24).

Project A

Project B

IRR

4- Compute the Profitability Index (PI) for each project?

Project A

Project B

Profitability Index (PI)

5- In light of your answers above, suppose that these two projects might be mutually exclusive or independent. According to these two assumptions, fill in the blanks in the table below with the suitable answer:

Points

Investment Criteria

If A and B are mutually exclusive, then I would select

If A and B are independent, then I would select

PBP

NPV

IRR

PI

can anyone help me gor my homework

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