Question

You are considering two independent projects both of which have been assigned a discount rate of...

You are considering two independent projects both of which have been assigned a discount rate of 11.5% percent. Based on the project NPV, what is your recommendation concerning these projects?

Project A
Year Cash Flow
0 -$91,850
1 $28,405
2 $64,890
Project B
Year Cash Flows
0 -$45,000
1 $38,500
2 $17,325


Select one:

a. You should reject both projects.

b. You should accept project A and reject project B.

c. You should accept project B and reject project A.

d. You should accept both projects.

e. You should accept project A and be indifferent to 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
You are considering two independent projects both of which have been assigned a discount rate of...
You are considering two independent projects both of which have been assigned a discount rate of 15% percent. Based on the project NPV, what is your recommendation concerning these projects? Project A Project B Year Cash Flow Year Cash Flow 0 -$40,000 0 -$51,173 1 $35,000 1 $18,400 2 $27,000 2 $14,750 You should accept both projects. You should reject both projects. You should accept project B and reject project A. You should accept project A and reject project B....
11.    You are considering two independent projects both of which have been assigned a discount...
11.    You are considering two independent projects both of which have been assigned a discount rate of 15 percent. Based on the NPV rule, what is your recommendation concerning these projects? (a) You should accept both projects. (b) You should reject both projects. (c) You should accept project A and reject project B. (d) You should accept project B and reject project A. (e) None of the above is correct. 12.    New Labs just announced that it has...
Anne is considering two independent projects with 2-year lives. Both projects have been assigned a discount...
Anne is considering two independent projects with 2-year lives. Both projects have been assigned a discount rate of 13 percent. She has sufficient funds to finance one or both projects. Project A costs $38,500 and has cash flows of $19,400 and $28,700 for Years 1 and 2, respectively. Project B costs $41,000, and has cash flows of $25,000 and $22,000 for Years 1 and 2, respectively. Which project, or projects, if either, should you accept based on the profitability index...
You are considering two independent projects with the following cash flows. The required return for both...
You are considering two independent projects with the following cash flows. The required return for both projects is 10%. Given this information, which one of the following statements is correct? Year  Project A  Project B 0    -950,000  -125,000 1      330,000    55,000 2      400,000    50,000 3      450,000      50,000 You should accept project B because it has the higher IRR and reject project A You should accept project A because it has the higher NPV and you can not accept both projects You should accept...
(Mutually exclusive projects and​ NPV)  You have been assigned the task of evaluating two mutually exclusive...
(Mutually exclusive projects and​ NPV)  You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash​ flows: Year Project A Cash Flow Project B Cash Flow 0 ​$(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 are considering two independent projects. The required rate of return is 13.75 percent for Project...
You are considering two independent projects. The required rate of return is 13.75 percent for Project A and 14.25 percent for Project B. Project A has an initial cost of $51,400 and cash inflows of $21,400, $24,900, and $22,200 for Years 1 to 3, respectively. Project B has an initial cost of $38,300 and cash inflows of $18,000 a year for 3 years. Which project(s), if any, should you accept? A. Reject both Projects. B. Accept both projects. C. Accept...
​(Mutually exclusive projects and​ NPV)  You have been assigned the task of evaluating two mutually exclusive...
​(Mutually exclusive projects and​ NPV)  You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash​ flows: Year Project A Cash Flow Project B Cash Flow 0 ​$(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.)
You are considering two mutually exclusive projects that have been assigned the same discount rate of...
You are considering two mutually exclusive projects that have been assigned the same discount rate of 10.5 percent. Project A has an initial cost of $54,500, and should produce cash inflows of $16,400, $28,900, and $31,700 for Years 1 to 3, respectively. Project B has an initial cost of $79,400, and should produce cash inflows of $0, $48,300, and $42,100, for Years 1 to 3, respectively. What is the incremental IRR? 7.83% 5.40% −15.40% -4.67% 13.89%
1.     Suppose your firm is considering two independent projects with the cash flows shown as follows....
1.     Suppose your firm is considering two independent projects with the cash flows shown as follows. The required rate of return on projects of both of their risk class is 12 percent, and the maximum allowable payback and discounted payback statistic for the projects are two and a half and three years, respectively. Time 0 1 2 3 Project A Cash Flow ?5,000 1,000 3,000 5,000 Project B Cash Flow ?10,000 5,000 5,000 5,000 Use the payback decision rule to...
You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight-line...
You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight-line depreciation to a zero book value over the life of the project. Neither project has any salvage value. Project A Year Cash Flow 0 -$75,000 1 $19,000 2 $48,000 3 $12,000 Project B Year Cash Flow 0 -$70,000 1 $10,000 2 $16,000 3 $72, 000 Required rate of return 10% 13% Required payback period 2.0 years 2.0 years Based on the net present value...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT