Homework Answers
rate positively ..
| We have to compute the NPV of both the project. The with higher NPV will be selected | |||||||
| Year | A | B | PVIF @ 10% | Present value A | Present value B | ||
| 0 | -50000 | -50000 | 1 | (50,000.00) | (50,000.00) | ||
| 1 | 15000 | 0 | 0.909091 | 13,636.36 | - | ||
| 2 | 15000 | 0 | 0.826446 | 12,396.69 | - | ||
| 3 | 15000 | 0 | 0.751315 | 11,269.72 | - | ||
| 4 | 15000 | 0 | 0.683013 | 10,245.20 | - | ||
| 5 | 15000 | 99000 | 0.620921 | 9,313.82 | 61,471.21 | ||
| NPV = | 6,861.80 | 11,471.21 | |||||
| We can see the project B has higher NPV. | |||||||
| therefore we should select the project B | |||||||
Add Answer to:
Question 14 (2 points) 1. Two projects being considered are mutually exclusive and have the following...
1. Two projects being considered are mutually exclusive and have the following cash flows: Year 0...
1. Two projects being considered are mutually exclusive and have the following cash flows: Year 0 Project A -$50,000 15,000 15,000 15,000 15,000 15.000 Project B -$50,000 0 0 1 0 4 15 0 99,000 If the required rate of return on these projects is 10 percent, which would be chosen and why?
2. Two projects being considered are mutually exclusive and have the following projected cash flows:. If...
2. Two projects being considered are mutually exclusive and have the following projected cash flows:. If the required rate of return on these projects is 11 percent, which would be chosen and why? Project A Project B Year Cash Flow Cash Flow 0 -40,000 -40,000 1 15,625 0 2 15,625 0 3 15,625 0 4 15,625 0 5 15,625 99,500 3. Two projects being considered are mutually exclusive and have the following projected cash flows:. If the required rate of...
(Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive...
(Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows: Year Project A Project B Cash Flow Cash Flow $(102,000) $(102,000) 40,000 40.000 40.000 40,000 0 40,000 215,000 If the appropriate discount rate on these projects is 9 percent, which would be chosen and why? The NPV of Project Ass (Round to the nearest cont.)
4. Project Selection 20 points) Three mutually exclusive projects are being considered. The cash flows for...
4. Project Selection 20 points) Three mutually exclusive projects are being considered. The cash flows for each project are shown below. Use an MARR of 12% per year. Which of the three alternatives, if any, should be chosen? Why? State any assumptions required. 17.000 First cost, $ Annual revenue, $/yr Salvage value, $ Useful life, yr 12.000 6,000 4,000 26,200 8,200 4,500 4,500 5,200 3 6 4
Two mutually exclusive projects have the following projected cash flows: Year Project A Cash flow Project...
Two mutually exclusive projects have the following projected cash flows: Year Project A Cash flow Project B Cash Flow 0 -$50,000 -$50,000 1 25,625 0 2 25,625 0 3 25,625 0 4 25,625 0 5 15,625 150,000 If the required rate of return on these projects is 20 percent, what are the NPVs of two projects? Which project should be better? If they are standalone projects, what is the choice? If IRRA = 40.36%, IRRB = 24.57%, which project should...
If mutually exclusive projects with normal cash flows are being analyzed, the net present value (NPV)...
If mutually exclusive projects with normal cash flows are being analyzed, the net present value (NPV) and internal rate of return (IRR) methods agree. Projects Y and Z are mutually exclusive projects. Their cash flows and NPV profiles are shown as follows. NPV (Dollars) 800 Year Project Y Project Z 0 -$1,500 -$1,500 1 $200 $900 2 $400 $600 $600 $300 4 $1,000 $200 Project Y Project 2 If the weighted average cost of capital (WACC) for each project is...
Given the following cash flows for two mutually exclusive projects, and a required rate of return...
Given the following cash flows for two mutually exclusive projects, and a required rate of return of 12%, what is the EAA for Project A? Year Project A Project B 0 -580,000 -580,000 1 290,000 130,000 2 290,000 130,000 3 150,000 230,000 4 150,000 230,000 5 230,000 6 115,000 Given the following cash flows for two mutually exclusive projects, and a required rate of return of 12%, what is the EAA for Project A?
John is evaluating two mutually exclusive capital budgeting projects that have the following characteristics: 1 Cash...
John is evaluating two mutually exclusive capital budgeting projects that have the following characteristics: 1 Cash Flows Year Project Project R 0 $(10,000) $(10,000) 0 5,000 2 0 5.000 3 0 5,000 4 22,000 5,000 1) Calculate NPV of each project if the firm's required rate of return (1) is 9 percent. 2) which project should be purchased? >
Question 24 1 pts You are considering the following two mutually exclusive projects. Which project(s) should...
Question 24 1 pts You are considering the following two mutually exclusive projects. Which project(s) should be recommended? Project A Project B Year Cash Flow Year Cash Flow 0 $75,000 0 -$70,000 1 $19,000 1 $10,000 2 $48,000 2 $16,000 3 $12,000 3 $72,000 Required rate of return: 10 percent (for A) 13 percent (for B) O accept project B and reject project A. accept both project A and project B. O reject both project A and project B. O...
IRR—Mutually exclusive projects Bell Manufacturing is attempting to choose the better of two mutually exclusive projects...
IRR—Mutually exclusive projects Bell Manufacturing is attempting to choose the better of two mutually exclusive projects for expanding the firm's warehouse capacity. The relevant cash flows for the projects are shown in the following table: . The firm's cost of capital is 12%. a. Calculate the IRR for each of the projects. Assess the acceptability of each project on the basis of the IRRs. b. Which project is preferred? 0 Data Table a. The internal rate of return (IRR) of...
1. Two projects being considered are mutually exclusive and have the following cash flows: Year 0 Project A -$50,000 15,000 15,000 15,000 15,000 15.000 Project B -$50,000 0 0 1 0 4 15 0 99,000 If the required rate of return on these projects is 10 percent, which would be chosen and why?
(Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows: Year Project A Project B Cash Flow Cash Flow $(102,000) $(102,000) 40,000 40.000 40.000 40,000 0 40,000 215,000 If the appropriate discount rate on these projects is 9 percent, which would be chosen and why? The NPV of Project Ass (Round to the nearest cont.)
4. Project Selection 20 points) Three mutually exclusive projects are being considered. The cash flows for each project are shown below. Use an MARR of 12% per year. Which of the three alternatives, if any, should be chosen? Why? State any assumptions required. 17.000 First cost, $ Annual revenue, $/yr Salvage value, $ Useful life, yr 12.000 6,000 4,000 26,200 8,200 4,500 4,500 5,200 3 6 4
If mutually exclusive projects with normal cash flows are being analyzed, the net present value (NPV) and internal rate of return (IRR) methods agree. Projects Y and Z are mutually exclusive projects. Their cash flows and NPV profiles are shown as follows. NPV (Dollars) 800 Year Project Y Project Z 0 -$1,500 -$1,500 1 $200 $900 2 $400 $600 $600 $300 4 $1,000 $200 Project Y Project 2 If the weighted average cost of capital (WACC) for each project is...
John is evaluating two mutually exclusive capital budgeting projects that have the following characteristics: 1 Cash Flows Year Project Project R 0 $(10,000) $(10,000) 0 5,000 2 0 5.000 3 0 5,000 4 22,000 5,000 1) Calculate NPV of each project if the firm's required rate of return (1) is 9 percent. 2) which project should be purchased? >
Question 24 1 pts You are considering the following two mutually exclusive projects. Which project(s) should be recommended? Project A Project B Year Cash Flow Year Cash Flow 0 $75,000 0 -$70,000 1 $19,000 1 $10,000 2 $48,000 2 $16,000 3 $12,000 3 $72,000 Required rate of return: 10 percent (for A) 13 percent (for B) O accept project B and reject project A. accept both project A and project B. O reject both project A and project B. O...
IRR—Mutually exclusive projects Bell Manufacturing is attempting to choose the better of two mutually exclusive projects for expanding the firm's warehouse capacity. The relevant cash flows for the projects are shown in the following table: . The firm's cost of capital is 12%. a. Calculate the IRR for each of the projects. Assess the acceptability of each project on the basis of the IRRs. b. Which project is preferred? 0 Data Table a. The internal rate of return (IRR) of...
Most questions answered within 3 hours.
-
Suppose X∼Exp(λ) for some λ >0. Compute E(X) and Var(X).
asked 11 minutes ago -
Xanth Co. has 8.9% annual coupon bonds with face value of $1,000
and 7 years remaining...
asked 8 minutes ago -
The Bellevue University bookstore purchases sweatshirts with the
school name and logo from a vendor. The...
asked 12 minutes ago -
If you invest the $10,000 you receive at graduation in a mutual
fund which averages a...
asked 14 minutes ago -
Consider 15 mL of an aqueous solution containing 2.0 g of an
organic solute.If the distribution...
asked 14 minutes ago -
Define the following Marketing Psychology Principles of Human
Behavior: Priming, Reciprocity, Social Proof, Decoy Effect,
Scarcity,...
asked 30 minutes ago -
What does the graph of Range vs angle look like? Also what is
the slope of...
asked 33 minutes ago -
a
sample size of _ is needed So there a 99% confidence interval will
have a...
asked 38 minutes ago -
Strategy is an important part of project management and business
decisions. Define strategy and describe in...
asked 41 minutes ago -
Task 5.2 Numerical Analysis Using Nested Loops (13 pts)
Consider the following program:
void setup()
{...
asked 55 minutes ago -
If a lossless transformer has 1000 turns for a primary winding
and 100 turns for the...
asked 1 hour ago -
Write the net ionic equation for the precipitation reaction that
occurs when aqueous solutions of potassium...
asked 1 hour ago