Project S has a cost of $9,000 and is expected to produce benefits (cash flows) of $2,700 per year for 5 years. Project L costs $26,000 and is expected to produce cash flows of $7,100 per year for 5 years.
Calculate the two projects' NPVs, assuming a cost of capital of 10%. Round your answers to the nearest cent.
Project S | $ ________ |
Project L | $ ________ |
Which project would be selected, assuming they are mutually
exclusive?
_________________
Project S | ________ % |
Project L | ________ % |
Which project would be selected, assuming they are mutually
exclusive?
_________________
Calculate the two projects' MIRRs, assuming a cost of capital of 10%. Round your answers to two decimal places.
Project S | ________ % |
Project L | ________ % |
Which project would be selected, assuming they are mutually
exclusive?
_________________
Project S | ________ |
Project L | ________ |
Which project would be selected, assuming they are mutually
exclusive?
_________________
Which project should actually be selected?
_________________
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