Consider the following cash flows for projects A and B. Year
Consider the following cash flows for projects A and B.
Year Project A Project B
0 -$1000 -$1000
1 375 900
2 375 700
3 375 500
4 375 -200
5 -100 200
The cost of capital for both projects is 10%. What is the profitability index of projects A and B, respectively?
Homework Answers
The following are the cash flows of two projects: Year Project A Project B 0 −$...
The following are the cash flows of two projects: Year Project A Project B 0 −$ 300 −$ 300 1 180 200 2 180 200 3 180 200 4 180 If the opportunity cost of capital is 12%, what is the profitability index for each project?
The following are the cash flows of two projects: Year Project A Project B 0 −$...
The following are the cash flows of two projects: Year Project A Project B 0 −$ 220 −$ 220 1 100 120 2 100 120 3 100 120 4 100 If the opportunity cost of capital is 10%, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 4 decimal places.)
The following are the cash flows of two projects: Year Project A $ (200) 80 80...
The following are the cash flows of two projects: Year Project A $ (200) 80 80 80 Project B $ (200) 100 100 100 AWN If the opportunity cost of capital is 11%, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 4 decimal places.) Answer is complete but not entirely correct. Project Profitability Index 1.2410 % 1.2218 B
Refer to two projects with the following cash flows: Year Project A Project B 0...
Refer to two projects with the following cash flows: Year Project A Project B 0 -$120 -$120 1 50 60 2 50 60 3 50 60 4 50 If the opportunity cost of capital is 13%, what is the profitability index for each project? (Round to 4 decimal places.) Does the profitability index rank the projects A and B correctly?
Consider two mutually exclusive projects with the following cash flows: Project S is a 4 year...
Consider two mutually exclusive projects with the following cash flows: Project S is a 4 year project with initial (time 0) cash outflow of 3000 and time 1 through 4 cash inflows of 1500, 1200, 800 and 300 respectively. Project L is a 4 year project with initial (time 0) cash outflow of 3000 and time 1 through 4 cash inflows of 400, 900, 1300, and 1500 respectively. Assuming a 5% cost of capital, compute the IRR for project S.
by hand #1 Questions a) to c) refer to two projects with the following cash flows:...
by hand
#1 Questions a) to c) refer to two projects with the following cash flows: Year Project B Project A - $200 80 -$200 100 80 100 80 100 Projects A and B are mutually exclusive. a) Calculate the Payback, Discounted Payback, NPV, IRR, and Profitability Index for Projects A and B using an opportunity cost of capital of 10% (where applicable). Which of these projects is worth pursuing? Explain. b) Calculate the Payback, Discounted Payback, NPV, IRR, and...
Question 9 5 pts Use the following after-tax cash flows for project A and B to...
Question 9 5 pts Use the following after-tax cash flows for project A and B to answer the following question: (Numbers in parentheses are negative cash flows). These two projects are independent Year Cash Flow of A Cash Flow of B 0 ($2,400) ($4,500) 1 $999 $800 2 $950 $950 3 ($150) $950 4 $910 $800 5 $990 $900 6 ($500) $1980 Which project should be taken if the required rate of return is 10%? o Take both projects o...
Your firm is considering two projects with the following cash flows: Cash flows from project B...
Your firm is considering two projects with the following cash flows: Cash flows from project B (£000) (500) 200 250 170 25 30 Year Cash flows from project A (£000) 0(500) 167 180 160 100 100 4 1. Calculate the ARR and payback rule 2. If the appropriate discount rate is 12%, rank the two projects 3. Which project is preferred if you rank by IRR? 4. Calculate the discount rate (r) for which the NPVs of both projects are...
Consider two mutually exclusive projects with the following cash flows: Project A is a 6 year...
Consider two mutually exclusive projects with the following cash flows: Project A is a 6 year project with initial (time 0) cash outflow of 40,000 and time 1 through 6 cash inflows of 8000,14000,13000,12000,11000,and 10000 respectively. Project B is a 3 year project with initial (time 0) cash outflow of 20,000 and time 1 through 3 cash inflows of 7000,13000, and 12000 respectively. Assuming a 11.5% cost of capital compute the NPV for project A.
Consider the following projects: Cash Flows (S) -10,600 -20,600 C1 21,200 36,050 Assume that the projects...
Consider the following projects: Cash Flows (S) -10,600 -20,600 C1 21,200 36,050 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 11%. a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project Profitability Index b-1. Calculate the profitability-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Profitabillty-Index b-2. Which project should you choose? Project...
The following are the cash flows of two projects: Year Project A $ (200) 80 80 80 Project B $ (200) 100 100 100 AWN If the opportunity cost of capital is 11%, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 4 decimal places.) Answer is complete but not entirely correct. Project Profitability Index 1.2410 % 1.2218 B
by hand
#1 Questions a) to c) refer to two projects with the following cash flows: Year Project B Project A - $200 80 -$200 100 80 100 80 100 Projects A and B are mutually exclusive. a) Calculate the Payback, Discounted Payback, NPV, IRR, and Profitability Index for Projects A and B using an opportunity cost of capital of 10% (where applicable). Which of these projects is worth pursuing? Explain. b) Calculate the Payback, Discounted Payback, NPV, IRR, and...
Question 9 5 pts Use the following after-tax cash flows for project A and B to answer the following question: (Numbers in parentheses are negative cash flows). These two projects are independent Year Cash Flow of A Cash Flow of B 0 ($2,400) ($4,500) 1 $999 $800 2 $950 $950 3 ($150) $950 4 $910 $800 5 $990 $900 6 ($500) $1980 Which project should be taken if the required rate of return is 10%? o Take both projects o...
Your firm is considering two projects with the following cash flows: Cash flows from project B (£000) (500) 200 250 170 25 30 Year Cash flows from project A (£000) 0(500) 167 180 160 100 100 4 1. Calculate the ARR and payback rule 2. If the appropriate discount rate is 12%, rank the two projects 3. Which project is preferred if you rank by IRR? 4. Calculate the discount rate (r) for which the NPVs of both projects are...
Consider the following projects: Cash Flows (S) -10,600 -20,600 C1 21,200 36,050 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 11%. a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project Profitability Index b-1. Calculate the profitability-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Profitabillty-Index b-2. Which project should you choose? Project...
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