use Excel / excel formulas answering the following :

Basic (Questions 1-22) LO1 1. Calculating Payback What is the payback period for the following set of cash flows? Year Cash Flow 0 -$7,800 3,100 W N 3,200 2,200 4 1,400L01 3. Calculating Payback Stenson, Inc., imposes a payback cutoff of three years for its international investment projects. If the company has the following two projects available, should it accept either of them? Year Cash Flow (A) Cash Flow (B) 0 -$75,000 -$125,000 1 33,000 29,000 2 36,000 32,000 3 19,000 35,000 4 9,000 240,000 L03 5. Calculating IR A rm evaluates all of its projects by applying the IRR rule. If the required return is 11 percent, should the rm 22 accept the following project? Year Cash Flow 0 -$157,300 1 74,000 2 87,000 3 46,000 L03, L04 7. Calculating NPV and IR A project that provides annual cash ows of $2,620 for eight years costs $9,430 today. 22 Is this a good project if the required return is 8 percent? What if it's 24 percent? At what discount rate would you be indifferent between accepting the project and rejecting it? LO49. Calculating NPV For the cash flows in the previous problem, what is the NPV at a discount rate of 0 percent? What if the discount rate is 10 percent? If it is 20 percent? If it is 30 percent?L03, L04 ll. NPV versus IRR Consider the following two mutually exclusive projects: 22 Year Cash Flow (X) Cash Flow (Y) 0 $23,900 -$23,900 1 13,100 9,300 2 9,480 10,620 3 7,890 11,180 Sketch the NPV proles for X and Y over a range of discount rates from 0 to 25 percent. What is the crossover rate for these two projects? LO6 13. Calculating Profitability Index What is the profitability index for the following set of cash flows if the relevant discount rate is 10 percent? What if the discount rate is 15 percent? If it is 22 percent? Year Cash Flow O -$29,500 16,900 N 13,600 w 8,300L01, L03, 15. Comparing Investment Criteria Consider the following two mutually exclusive projects: L04, L06 22 Year Cash Flow (A) Cash Flow (B) 0 $245,000 $5 3,000 1 34,000 31,900 2 49,000 21,800 3 51,000 17,300 4 325,000 16,200 Whichever project you choose, if any, you require a return of 13 percent on your investment. a. If you apply the payback criterion, which investment will you choose? Why? I). If you apply the NPV criterion, which investment will you choose? Why? c. If you apply the IRR criterion, which investment will you choose? Why? d. If you apply the protability index criterion, which investment will you choose? Why? e. Based on your answers in parts (a) through (d), which project will you nally choose? Why? LO4, L06 17. NPV and Profitability Index Coore Manufacturing has the following two possible projects. The required return is 12 percent. Year Project Y Project Z O -$47,600 -$81,000 W N - 23,900 34,000 18,600 32,800 20,700 30,500 4 14,600 27,300 a. What is the profitability index for each project? b. What is the NPV for each project? c. Which, if either, of the projects should the company accept?L01, L03 l9. Payback Period and [RR Suppose you have a project with a payback period exactly equal to the life of the project. What do you know about the IRR of the project? Suppose that the payback period is never. What do you know about the IRR of the project now? L01, L04 21. NPV and Payback Period Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 10 percent. Year Project F Project G 0 -$195,000 -$298,000 1 98,400 71,600 2 86,300 94,500 3 81,600 123,600 4 72,000 166,800 5 64,800 187,200 2. Calculate the payback period for both projects. 1]. Calculate the NPV for both projects. c. Which project, if any, should the company accept? LO3, LO4 25. Calculating IRR A project has the following cash flows: Year Cash Flow O $112,000 - 67,000 2 - 57,000 What is the IRR for this project? If the required return is 10 percent, should the firm accept the project? What is the NPV of this project? What is the NPV of the project if the required return is 0 percent? 24 percent? What is going on here? Sketch the NPV profile to help you with your answer.L04 28. NPV Valuation The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is "looking up." As a result, the cemetery project will provide a net cash inow of $164,000 for the rm during the rst year, and the cash ows are projected to grow at a rate of 4.7 percent per year forever. The project requires an initial investment of $1,825,000. 2. If the company requires a return of 12 percent on such undertakings, should the cemetery business be started? I). The company is somewhat unsure about the assumption of a 4.7 percent growth rate in its cash ows. At what constant growth rate would the company just break even if it still required a return of 12 percent on its investment