Tri Star, Inc., has the following mutually exclusive
projects:
Year | Project A | Project B | |||||
0 | –$ | 13,400 | –$ | 8,800 | |||
1 | 8,000 | 3,500 | |||||
2 | 6,600 | 3,000 | |||||
3 | 2,100 | 5,400 | |||||
Calculate the payback period for each project. (Do not
round intermediate calculations and round your answers to 2 decimal
places, e.g., 32.16.)
Payback Period | |
Project A | years |
Project B | years |
Based on the payback period, which project should the company
accept?
Project A
Project B
If the appropriate discount rate is 13 percent, what is the NPV
for each project? (Do not round intermediate calculations
and round your answers to 2 decimal places, e.g.,
32.16.)
NPV | |
Project A | $ |
Project B | $ |
Based on the NPV, which project should the company
accept?
Project B
Project A
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