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6. Use the following after-tax cash flows for project A and B to answer the following...

6. 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
What is the approximate IRR of project A if the required rate of return is 10%?

Group of answer choices

a. 12.30%

b. 13.24%

c. 12.58%.

d. 19.76%

e. 14.23%

7.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
What is the approximate payback of project B if the required rate of return is 10%?

Group of answer choices

a. 4.56 years

b. 6 years

c. 5.05 years.

d. The payback cannot be calculated.

e. 4.96 years

8. 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
What is the approximate crossover point between the two projects if the required rate of return is 10%?

Group of answer choices

a. 9.41%

b. 7.73%

c. 8.95%

d. 8.09%

e. There is no crossover point in this case.

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Answer #1

B10 fc =IRR(B3:39) с E F G J D Project B year 2 year A B 1 Project A Cash flows 3 o $ (2,400.00) 4 1 $ 999.00 5 2 $ 950.00 6

B10 =IRR(B3:39) B с E F G H А 1 Project A D Project B year 0 2 year Cash flows Cross over rate year 0 30 -2400 Cash flows Cum

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