Question
You will use the following information to answer three questions. You have been asked to analyze two proposed capital investments. The information related to each
You will use the following information to answer three questions.
You have been asked to analyze two proposed capital investments. The information related to each project is listed below.
| Project A | Project B | |
| Initial Cost | $300,000 | $500,000 |
| Cash Flows | ||
| Year 1 | $75,000 | $100,000 |
| Year 2 | $75,000 | $110,000 |
| Year 3 | $75,000 | $125,000 |
| Year 4 | $75,000 | $140,000 |
| Year 5 | $75,000 | $175,000 |
| Salvage Value | $25,000 | $10,000 |
What is the NPV for Project B? Assume a corporate cost of capital rate of 8%. Use the format XXX,XXX.XX.
What is the IRR of Project B? Use the format XX.X%.
What is the MIRR of Project B? Use the format XX.X%.
What is the Profitability Index for Project B? Use the format XX.XX.
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Financial Markets And Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
7th Edition
013213683X, 978-0132136839
