Question

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 $ (210 ) $ (210 )
1 90 110
2 90 110
3 90 110
4 90
If the opportunity cost of capital is 12%, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 4 decimal places.)
project A:
project B:

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
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 $ (210 ) $ (210 ) 1 90 110 2 90 110 3 90 110 4 90 a. Calculate the NPV for both projects if the opportunity cost of capital is 17%. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
The following are the cash flows of two independent projects: Year Project A Project B 0...
The following are the cash flows of two independent projects: Year Project A Project B 0 $ (230 ) $ (230 ) 1 110 130 2 110 130 3 110 130 4 110 a. If the opportunity cost of capital is 11%, calculate the NPV for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. Which of these projects is worth pursuing? Project A Project B Both Neither
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 $ (350 ) $ (350 ) 1 180 250 2 180 250 3 180 250 4 180 a. Calculate the NPV for both projects if the opportunity cost of capital is 16%. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Consider the following projects: Cash Flows ($) Project C0 C1 D –10,900 21,800 E –20,900 36,575...
Consider the following projects: Cash Flows ($) Project C0 C1 D –10,900 21,800 E –20,900 36,575 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 8%. a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project Profitability Index D E b-1. Calculate the profitability-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Profitability-index b-2....
Consider the following projects: Cash Flows ($) Project C0 C1 D –11,300 22,600 E –21,300 37,275...
Consider the following projects: Cash Flows ($) Project C0 C1 D –11,300 22,600 E –21,300 37,275 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 9%. a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project Profitability Index D E b-1. Calculate the profitability-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Profitability-index b-2....
Here are the cash-flow forecasts for two mutually exclusive projects: Cash Flows (dollars) Year Project A...
Here are the cash-flow forecasts for two mutually exclusive projects: Cash Flows (dollars) Year Project A Project B 0 − 120 − 120 1 50 69 2 70 69 3 90 69 a-1. What is the NPV of each project if the opportunity cost of capital is 2%? (Do not round intermediate calculations. Round your answers to 2 decimal places.) a-2. Which project would you choose? b-1. What is the NPV of each project if the opportunity cost of capital...
The following are the cash flows of two projects: Year Project A Project B 0 -$...
The following are the cash flows of two projects: Year Project A Project B 0 -$ 230 -$ 230 1 110 130 2 110 130 3 110 130 4 110 What are the internal rates of return on projects A and B? (Enter your answers as a percent rounded to 2 decimal places.)
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$40,000...
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$40,000       –$180,000       1 25,000       15,000       2 22,000       45,000       3 20,000       50,000       4 15,000       275,000       The required return on these investments is 11 percent. Required: (a) What is the payback period for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Payback period   Project A years     Project B years  ...
Consider the following cash flows on two mutually exclusive projects: Year Project A Project B 0...
Consider the following cash flows on two mutually exclusive projects: Year Project A Project B 0 –$ 61,000 –$ 76,000 1 41,000 40,000 2 36,000 49,000 3 31,000 52,000    The cash flows of Project A are expressed in real terms while those of Project B are expressed in nominal terms. The appropriate nominal discount rate is 12 percent and the inflation rate is 3 percent.    Calculate the NPV for each project. (Do not round intermediate calculations and round...
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 $ (390 ) $ (390 ) 1 220 290 2 220 290 3 220 290 4 220 a. Calculate the NPV for both projects if the opportunity cost of capital is 17%. Project A: Project B:
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT