Question
WILL THUMBS UP FOR CORRECT ANSWER! :) 1) General Motors is evaluating a project which has the initial cost of $10,000 and generates the following
WILL THUMBS UP FOR CORRECT ANSWER! :)
1) General Motors is evaluating a project which has the initial cost of $10,000 and generates the following cash flow.
Year | 1 | 2 | 3 | 4 | 5 |
Cash flow | 5,000 | 3,000 | 4,000 | 8,000 | 10,000 |
The firm's cost of capital is 10%. Calculate NPV, IRR, MIRR, PI, payback period and discounted payback period of the project.
NPV = $ IRR = % MIRR = % PI = Payback = years Discounted payback = years
2) Regardless of your answers above, let's assume your assistant calculates the following for Pepsi's project.
Tela's project NPV ($) 10,258 IRR (%) 13 MIRR (%) 10 PI 1.5 Payback (years) 3 Discounted payback (years) 3.5 Pepsi's cost of capital is 9%. Its critical payback and discounted payback periods are 2 and 2.5, respectively. Should the project be accepted under each measurement?
Group of answer choices (Options = accept the project OR do NOT accept the project) NPV [ Choose ] IRR [ Choose ] MIRR [ Choose ] PI [ Choose ] Payback [ Choose ] Discounted payback [ Choose ]
3) Pepsi considers two mutually exclusive projects: code name Heterodon and Nerodia.
Which project should be accepted under each measurement?
Heterodon NPV ($) 2,578 IRR (%) 12 MIRR (%) 10 PI 1.2 Payback period (years) 3 Discounted payback period (years) 4.2
Nerodia NPV ($) 3,842 IRR (%) 14 MIRR (%) 11 PI 1.5 Payback period (years) 3.8 Discounted payback period (years) 4.8
Pepsi's cost of capital is 8%. Its critical payback period is 2 years and critical discounted payback period is 3 years.
Group of answer choices (Options = Heterodon should be accepted OR Nerodiashould be accepted OR NEITHER should be accepted) NPV [ Choose ] IRR [ Choose ] MIRR [ Choose ] PI [ Choose ] Payback period [ Choose ] Discounted payback period [ Choose ]
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