Homework Answers
Project - 1:
NPV :
IRR:
Project - 2:
NPV:
IRR :
IRR = 16.80%
NPV:
Project - 1 = 866,161.94
Project - 2 = 1,225,253.43
IRR:
Project - 1 = 19.86%
Project - 2 = 16.80%
conclusion:
Project - 2 should be selected because it has higher NPV
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please give a written answer, please do not use excel as it has
to be written out. thank you.
You must analyze the cash flows of two projects, S and L. Project S: CFO = -1500; CF1 = 800; CF2 = 700; CF3 = 100; CF4 = 600 Project L: CFO = -1500; CF1 = 200; CF2 = 600; CF3 = 900; CF4 = 700 Given a required rate of return of 10%, what is the IRR of the better...
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service contract for its maintenance
work. One firm has offered a
four-year contract for $215,000 up front,
while another firm has
offered a
six-year
contract for $340,000 up front. The firm will be able
to save $81,000 per year under either contract because its
employees will no longer have to do the work
themselves.
a. If the firm's cost of capital is 6%, which
project should be selected? Show NPV and
EAA capital budgeting...
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