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All techniques: Decision among mutually exclusive investments Pound Industries is attempting to select the best of three mutually exclusive projects. The initial investment and after-tax cash inflows

All techniques: Decision among mutually exclusive investments Pound Industries is attempting to select the best of three mutually exclusive projects. The initial investment and after-tax cash inflows associated with these projects are shown in the following table. Cash Flows Project A Project B Project C Initial Investment (CFO) -$60,000 -$100,000 -$110,000 Cash Inflows (CFt), t= 1 to 5 20,000 31,500 32,500 a. Calculate the payback period for each project. (screenshot your calculations using online Financial calculator) b. Calculate the Net Presenting Value (NPV) for each project, assuming that the firm has a cost of capital equal to 13%. (screenshot your calculations using online Financial calculator) c. Calculate the internal rate of return (IRR) for each project. (screenshot your calculations using online Financial calculator) d. Draw the net present value profiles for both projects on the same set of axes, and discuss any conflict in ranking that may exist between NPV and IRR. (screenshot your calculations using online Financial calculator) e. Summarize the preferences dictated by each measure, and indicate which project you would recommend. Explain why. 

Apr 15 2021 View more View Less

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