Consider the following two mutually exclusive projects: Whichever project you ch
ID: 2651688 • Letter: C
Question
Consider the following two mutually exclusive projects:
Whichever project you choose, if any, you require a 15 percent return on your investment.
The payback period for Projects A and B is and years, respectively.(Round your answers to 2 decimal places. (e.g., 32.16))
The discounted payback period for Projects A and B is and years, respectively. (Round your answers to 2 decimal places. (e.g., 32.16))
The NPV for Projects A and B is $ and $, respectively. (Do not include the dollar sign ($). Round your answers to 2 decimal places. (e.g., 32.16))
The IRR for Projects A and B is percent and percent, respectively. (Do not include the percent sign (%). Round your answers to 2 decimal places. (e.g., 32.16))
The profitability index for Projects A and B is and , respectively. (Round your answers to 3 decimal places. (e.g., 32.161))
Based on your answers in (a) through (e), you will finally choose Projec
Consider the following two mutually exclusive projects:
Explanation / Answer
Reuired Return 15% Year CFA CFB PVF PVCF A PVCF B 0 (300,000.00) (40,000.00) 1 (300,000.00) (40,000.00) 1 20,000.00 19,000.00 0.869565 17,391.30 16,521.74 2 50,000.00 12,000.00 0.756144 37,807.18 9,073.72 3 50,000.00 18,000.00 0.657516 32,875.81 11,835.29 4 390,000.00 10,500.00 0.571753 222,983.77 6,003.41 NPV 11,058.07 3,434.16 Choose project A on basis of NPV A Payback for A 4 years, for B 3 Years B Pyback for A & B both 4 Years C) Choose project A on basis of NPV D) IRR A 16% IRR B 19% E) Choose project A on basis of NPV