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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 ]

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