Question

106) Consider the following two mutually exclusive projects: 14 Year Cash Flow (A) - 54,000 12,700 23,200 27,600 46,500 Cash Flow (B) -$ 23,000 11,600 11,200 12,500 6,000 0 1 2 3 4 Whichever project you choose, if any, you require a rate of return of 14 percent on your investment. If you apply the payback criterion, you will choose Project IRR criterion, you will choose Project Based on your first four answers, which project will you finally choose? А) A;B В; А; А; В В) A; А;B B; В; А C) A;B А; В; В; в D) B;B A; B; А; А E) В; А; В; B; А ; if you apply the NPV criterion, you will choose Project ; if you choose the profitability index criterion, you will choose Project ; if you apply the

Answer 1

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ANSWER : D): B, A, B, A, A

projects (Autosaved) (Autosaved) (Autosaved) - Microsoft Excel (Product Activation Failed) File Home Insert Page Layout Formulas Data Review View Add-Ins Z AutoSum Cut A Wrap Text Calibri 11 General ECopy Fill Merge & Center Paste в IU* 000 Conditional Format Cell Insert Delete Format Sort & Find & $ % Format Painter Clear Filter Select Formatting as Table Styles Clipboard Font Alignment Number Styles Cells Editing fox QD515 PY PZ QA QB QC QD QE QF 515 516 CUMULATIVE CF CUMULATIVE CF 517 YEAR CASH FLOW (A) 518 CASH FLOW (B) FOR B FOR A -54000 519 0 -54000 -23000 -23000 11600 520 12700 -41300 -11400 521 2 23200 11200 -18100 -200 522 27600 3 12500 9500 12300 523 46500 6000 56000 18300 524 525 RATE 14% 14% 526 2 YEARS CCFAT2/CFAT3 527 PAYBACK PERIOD = FOR A 528 2 +(18100/27600) 529 2.6558 530 SELECT B 2 YEARS CCFAT2/CFAT3 531 FOR B 2 (200/12500) 532 2.016 533 STEIN i IRRnpvbeta HPR GMAM EAC MACRS NPV BETA LEVERED MI-пр-ir REPLACEMENT RATION PBP ARR invest, EAA REPLACEMENT S RELEVANT BOND OPTION TO WAIT erences: KS336 130% 05:41 W X ENG 21-11-2019

projects (Autosaved) (Autosaved) (Autosaved) - Microsoft Excel (Product Activation Failed) Page Layout File Home Insert Formulas Data Review View Add-Ins Z AutoSum Cut Wrap Text Calibri 11 General Copy Fill Merge & Center Conditional Format Formatting as Table Styles Paste в IU* $ % , 090 Cell Insert Delete Format Sort & Find & Format Painter Clear Filter Select Clipboard Font Alignment Number Styles Cells Editing fox QB546 PY PZ QА QВ Ос QD QE QF 534 535 FOR A 536 NPV 21152.94 SELECT A 537 FOR B 7783.10 538 539 IRR FOR A 28.50% 540 FOR B 30.94% SELECT B 541 FOR A 542 PI 1.39 543 FOR B 1.34 SELECT A 544 545 В, А, В, А, А 546 ANSWER: 547 548 549 550 551 552 HPR GMAM STEIN i EAC MACRS NPV RELEVANT BETA LEVERED IRRnpvbeta invest, EAA M-пр-ir REPLACEMENT RATION PBP ARR REPLACEMENT S BOND OPTION TO WAIT erences: NL296 + 130% 05:41 W ENG 21-11-2019