Question

YEAR PROJECT A CASH FLOW PROJECT B CASH
FLOW

0 -110,000 -110,000

1 30,000 0

2 30,000 0

3 30,000 0

4 30,000 0

5 30,000 230,000

(Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows: If the appropriate discount rate on these projects is 12 percent, which would be chosen and why?

Answer #1

A:

Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate

=$30,000[1-(1.12)^-5]/0.12

=$30,000*3.604776202

=$108,143.29

NPV=Present value of inflows-Present value of outflows

=$108,143.29-$110,000

=($1856.71)(Approx)(Negative).

B:

Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=230,000/1.12^5

=230,000*0.567426855

=$130508.18

NPV=Present value of inflows-Present value of outflows

=$130508.18-$110,000

=$20508.18(Approx).

Hence **B must be selected having higher and positive
NPV.**

You have been assigned the task of evaluating two mutually
exclusive projects with the following projected cash flows:
Year
Project A
cash flow
Project B
cash flow
0
$(110,000)
$(110,000)
1
30,000
00
2
30,000
00
3
30,000
00
4
30,000
00
5
30,000
230,000
If the appropriate discount rate on these projects is
8%,
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
Cash Flow
Project B
Cash Flow
0
$(102,000)
$(102,000)
1
30,000
00
2
30,000
00
3
30,000
00
4
30,000
00
5
30,000
210,000
If the appropriate discount rate on these projects is 11
percent, which would be chosen and why?
The NPV of Project B is $nothing.(Round to the nearest
cent.)

(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
Cash Flow
Project B
Cash Flow
0
$(90,000)
$(90,000)
1
32,000
0
2
32,000
0
3
32,000
0
4
32,000
0
5
32,000
240,000
If the appropriate discount rate on these projects is 9
percent, which would be chosen and why?
The NPV of Project A is $ _______. (Round to the nearest
cent.)

You have been assigned the task of evaluating two mutually
exclusive projects with the following projected cash flows:If the
appropriate discount rate on these projects is 11 percent, which
would be chosen and why?
YEAR PROJECT A CASH FLOW PROJECT B CASH
FLOW
0 -105,000 -105,000
1 37,000 0
2 37,000 0
3 37,000 0
4 37,000 0
5 37,000 230,000

Before whoever decides to answer the following problems, please
DO NOT use excel. I have posted this question already, and the
expert answered using excel to solve this problem. I am not good
with excel at all so I did not understand what was given. Would
rather have the problem worked out showing the formula and work
broken down and written out. Thank you in advance.
You have been assigned the task of evaluating two mutually
exclusive projects with the...

Consider the following two mutually exclusive projects:
Year 0 Cash Flow(X) - $19,200 Cash Flow(Y) -$19,200
Year 1 Cash Flow(X) 8,650 Cash Flow(Y) 9,700
Year 2 Cash Flow(X) 8,700 Cash Flow(Y) 7,600
Year 3 Cash Flow (X) 8,600 Cash Flow (Y) 8,500
A.) Calculate the IRR for each project.
Project X ___%
Project Y ___%
B.) What is the crossover rate for these two projects?
C.) What is the NPV of Projects X and Y at discount rates of 0...

3. A project has an initial cost of $30,000 and a 3-year life.
The company uses straight-line depreciation to a book value of zero
over the life of the project. The projected average net income from
the project is $1,766.67 per year for the next 3 years,
respectively. What is the accounting rate of return based on
average investment?
A. 11.78 percent
B. 14.69 percent
C. 8.72 percent
D. 11.04 percent
4. You are considering two mutually exclusive projects with...

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Year Project
A Project
B
0
-$15,300
-$10,700
1
8,700
5,300
2
7,400
4,300
3
3,100
4,800
------------------------------------------------
a. Suppose the company's payback cutoff is two years. Which of
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b. Suppose the company uses the NPV rule to rank these two
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Novell, Inc., has the following mutually exclusive projects.
Year
Project A
Project B
0
–$27,000
–$30,000
1
15,500
16,500
2
12,000
10,500
3
3,600
12,000
a-1.
Calculate the payback period for each project. (Do not
round intermediate calculations and round your answers to 3 decimal
places, e.g., 32.161.)
a-2.
If the company's payback period is two years, which, if either,
of these projects should be chosen?
Project A
Project...

Consider the following two mutually exclusive projects:
Year
Cash Flow (A)
Cash Flow (B)
0
–$218,917
–$16,419
1
25,700
5,985
2
53,000
8,370
3
58,000
13,931
4
420,000
8,655
Whichever project you choose, if any, you require a 6 percent
return on your investment.
What is the NPV for Project A?
What is the NPV for Project B?

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