Question

Platinum, Inc. is considering two mutually exclusive projects, X
and Y. Project X costs $95,000 today and is expected to generate
$65,000 in year one and $75,000 in year two. Project Y costs
$120,000 and is expected to generate $64,000 in year one, $67,000
in year two, $56,000 in year three, and $45,000 in year four. The
firm's investors require a rate of return of 15% and the weighted
average cost of capital is 12%. What is the equivalent annual
annuity for Project Y needed to compare the two projects?

Answer #1

Lithium, Inc. is considering two mutually exclusive projects, A
and B. Project A costs $95,000 and is expected to generate $65,000
in year one and $75,000 in year two. Project B costs $120,000 and
is expected to generate $64,000 in year one, $67,000 in year two,
$56,000 in year three, and $45,000 in year four. The firm's
required rate of return for these projects is 10%. Calculate the
net present value for Project A and B

The Beetroot Corporation is considering two MUTUALLY EXCLUSIVE
projects, Project A and Project B. The required rate of return is
10%. Project A costs $95,000 and will generate $65,000 in Year 1
and $75,000 in Year 2. Project B costs $120,000 and will generate
$64,000 in Year 1, then $67,000 in Year 2, $56,000 in Year 3, and
$45,000 in Year 4. The PROFITABILITY INDEX for Project B is:
Select one:
a. 1.33
b. 1.48
c. 1.39
d. 1.55

Lithium, Inc. is considering projects A. Project A costs $95,000
and is expected to generate $65,000 in year one and $75,000 in year
two. Lithium, Inc.'s required rate of return for these projects is
10%. The internal rate of return for Project A is

Project X and Project Y are two mutually exclusive projects.
Project X requires an initial outlay of $38,000 and generates a net
cash flow of $14,000 per year for six years. Project Y requires an
initial outlay of $52,000, and will generate cash flows of $15,300
per year for eight years. Which project should be chosen and why?
(Assume that the discount rate for both projects is 10
percent).
A. Project X because Project X has
a larger NPV than Project...

Your company is considering two mutually exclusive projects, X
and Y, whose costs and cash flows are shown below: Year X Y 0
-$5,000 -$5,000 1 1,000 4,500 2 1,500 1,500 3 2,000 1,000 4 4,000
500 The projects are equally risky, and their cost of capital is
14%. You must make a recommendation, and you must base it on the
modified IRR (MIRR). Calculate the two projects' MIRRs. Round your
answers to two decimal places. Project X % Project...

IRR: Mutually exclusive projects Ocean Pacific Restaurant is
evaluating two mutually exclusive projects for expanding the
restaurant's seating capacity. The relevant cash
flows for the projects are shown in the following table. The firm's
cost of capital is 4%.
Project X
Project Y
Initial Investment (CF)
980,000
363,000
Year
Cash inflows (CF)
1
150,000
110,000
2
170,000
98,000
3
220,000
93,000
4
270,000
82,000
5
340,000
67,000
a. calculate the IRR to the nearest whole percent for each of...

Your company is considering two mutually exclusive projects, X
and Y, whose costs and cash flows are shown below:
Year
X
Y
0
−$2,000
−$2,000
1
200
2,000
2
600
200
3
800
100
4
2,400
75
The projects are equally risky, and the firm's required rate of
return is 12 percent. You must make a recommendation, and you must
base it on the modified IRR. What is the MIRR of the best
project?
a.
12.00%
b.
12.89%
c.
11.46%...

Your company is considering two mutually exclusive projects, X
and Y, whose costs and cash flows are shown below:
Year
X
Y
0
-5000
-5000
1
1000
4500
2
1500
1500
3
2000
1000
4
4000
500
The projects are equally risky, and their cost of capital is
13%. You must make a recommendation, and you must base it on the
modified IRR (MIRR). Calculate the two projects' MIRRs. Do not
round intermediate calculations. Round your answers to two decimal...

Your company is considering two mutually exclusive projects, X
and Y, whose costs and cash flows are shown below:
Year
X
Y
0
-$5,000
-$5,000
1
1,000
4,500
2
1,500
1,500
3
2,000
1,000
4
4,000
500
The projects are equally risky, and their cost of capital is
11%. You must make a recommendation, and you must base it on the
modified IRR (MIRR). Calculate the two projects' MIRRs. Do not
round intermediate calculations. Round your answers to two decimal...

MIRR and NPV
Your company is considering two mutually exclusive projects, X
and Y, whose costs and cash flows are shown below:
Year
X
Y
0
-$5,000
-$5,000
1
1,000
4,500
2
1,500
1,500
3
2,000
1,000
4
4,000
500
The projects are equally risky, and their cost of capital is
15%. You must make a recommendation, and you must base it on the
modified IRR (MIRR). Calculate the two projects' MIRRs. Do not
round intermediate calculations. Round your answers...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 5 minutes ago

asked 7 minutes ago

asked 15 minutes ago

asked 40 minutes ago

asked 43 minutes ago

asked 59 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago