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Year Kaleb Konstruction, Inc., has the following mutually exclusive projects, A and B, available. The estimated life for both projects are four year. The estimated
Year Kaleb Konstruction, Inc., has the following mutually exclusive projects, A and B, available. The estimated life for both projects are four year. The estimated initial investment costs and the cash flows from assets produced by each project over the project life are presented in the following table. The unit of the numbers in the table is S in millions. The required return for both projects is 12 percent. Project A Project B 0 -201,000 -125,500 1 45,500 52,550 45,500 46,500 110,500 46,500 116,500 46,500 Reqirement 1 What is the NPV for each project? NPV Project $ 2 3 4 A $ Project B Reqirement 2 What is the IRR for each project? IRR Project A % Project B % Reqirement 3 What is the Profitability Index for each project? (No unit for the profitability index.) Profitability Index Project A Project B Reqirement 4 According to your analysis, which project, if any, should the company accept? (Fill in this cell with "1" or "2". If your choice is Project A, then fill in with "1". If your choice is Project B, then fill in with "2".) Project Regirement 5 At what discount rate do these two projects have the same net present value? Discount Rate %
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