Service

Chat Now

Consider projects A and B with the following cash flows: C0 C1 C2 C3 A Acˆ’ $ 40 +

Consider projects A and B with the following cash flows: C0 C1 C2 C3 A Acˆ’ $ 40 +

Consider projects A and B with the following cash flows:
    C0   C1   C2   C3  
  A   Acˆ’ $ 40   + $ 24   + $ 24   + $ 24  
  B   Acˆ’   65   +   34   +   34   +   34  
 
a-1.

What is the NPV of each project if the discount rate is 10%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

  Project NPV
A $
B $
 
a-2. Which project has the higher NPV?
   
 
  Project A
  Project B
b-1.

What is the profitability index of each project? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Project Profitability index    
A        
B        
 
b-2. Which project has the higher profitability index?
   
 
  Project A
  Project B
c-1.

Which project is most attractive to a firm that can raise an unlimited amount of funds to pay for its investment projects?

   
 
  Project A
  Project B
c-2. Which project is most attractive to a firm that is limited in the funds it can raise?
   
 
  Project A
  Project B
  Both
Abhinav 03-Dec-2019

Answer (UnSolved)

question Get solution