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# 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

Dec 03 2019 View more View Less