In determining which mutually exclusive project shall be selected, we shall choose the one which offers us the highest NPV and will substantially result in creating value to the enterprise.
In the given question, the project D is resulting in a highest NPV of 43,778 and the same shall be selected.
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Which of the following mutually exclusive projects should be accepted? Project INPV IRR Payback 12 years,...
Which of the following mutually exclusive projects should be accepted? Project 00D NPV +42,176 +39,090 +41,894 +43,778 38,952 Payback 2 years, +$10,500 2 years, +9,670 3 years, +16,620 3 years, +11,625 2 years, +15,475 IRR 16.4% 15.8% 13.2% 14.9% 15.9%
1. A. Which of the following mutually exclusive projects should be accepted? Project NPV Payback IRR A +42,176 2 years, +$10,500 16.4% B +39,090 2 years, +9,670 15.8% C +41,894 3 years, +16,620 13.2% D +43,778 3 years, +11,625 14.9% E +38,952 2 years, +15,475 15.9% B. What is the Payback Period of a project with an initial cost of $75,000, Year 1 cash flow of $20,000 which increases by 5% each year? If the Payback cutoff is 3 years,...
If the projects were independent, which project(s) would be accepted according to the IRR method? a) Neither b) Project A c) Project B d) Both Projects A or B If the projects were mutually exclusive, which project(s) would be accepted according to the IRR method? a) Neither b) Project A c) Project B d) Both Projects A or B The reason is a) TheNPV and IRR approaches use the same reinvestment rate assumption and so both approaches reach the same...
A firm is considering two mutually exclusive projects with equal lives, Project A has an NPV of $100,000, an IRR of 12%, and a payback period of 3.1 years. Project B has an NPV of $120,000, an IRR of 14%, and a payback period of 2.8 years. The firm should choose________. Question 34 options: 1) Project A because its NPV is higher than Project B's 2) Project A because its payback period is longer than Project B's 3) Project B...
5. Find the NPV, IRR, MIRR and Payback for the following projects; use a WACC of 10%. Year Project A Project B 0 -$130,000 -$130,000 1 $60,000 $35,000 2 $40,000 $40,000 3 $40,000 $45,000 4 $25,000 $70,000 Project A Project B NPV IRR MIRR Payback Period If projects A & B are mutually exclusive, which would you recommend be accepted? ___________________
Calculating Payback Period and NPV Novell, Inc., has the following mutually exclusive projects. Year Project A Project B 0 −$15,000 −$19,000 1 10,400 12,700 2 5,900 6,100 3 2,100 5,300 a.Suppose the company’s payback period cutoff is two years. Which of these two projects should be chosen? b.Suppose the company uses the NPV rule to rank these two projects. Which project should be chosen if the appropriate discount rate is 15 percent?
U WCI is question. xii. If two projects are mutually exclusive... a. neither should be accepted. b. you will always end up making the same accept/reject decisions whether you use the payback criterion or the discounted payback criterion. c. you will always end up making the same accept/reject decisions whether you use the NPV criterion or the IRR criterion. d. they have the same NPV. e. none of the above.
Calculating Payback Perlod and NPV Tri Star, Inc., has the following mutually exclusive projects. YEAR PROJECT AT PROJECT B -$15,300 w No 8,700 -$10,700 5,300 4,300 4,800 7,400 3,100 a. Suppose the company's payback period cutoff is two years. Which of these two projects should be chosen? b. Suppose the company uses the NPV rule to rank these two projects. Which project should be chosen if the appropriate discount rate is 15 percent?
Tri Star inc has the following mutually exclusive projects. Calculate the payback period for each project. Based on the payback period which project should the company accept? If the appropriate discount rate is 13 percent what is the NPV for each project? Proiect YearProject A 0$13,400-S8,800 1 2 3 8,000 6,600 2,100 3, 500 3,000 5, 400
Isaac has analyzed two mutually exclusive projects that have 3-year lives. Project A has an NPV of $81,406, a payback period of 2.48 years, and an IRR of 9.31 percent. Project B has an NPV of $82,909, a payback period of 2.57 years, and an IRR of 9.22 percent. The firm’s cost of capital is 9.15 percent and required payback period is 2.8 years. Isaac must make a recommendation and justify it in 15 words or less. What should his...