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Problem 5 18 Comparing Investment Criteria Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company Assume the discount rate for Tokyo Rubber Company is

Problem 5-18 Comparing Investment Criteria

Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the discount rate for Tokyo Rubber Company is 10 percent.

 

Year Dry Prepreg Solvent Prepreg
0 Ac€?o$ 1,730,000   Ac€?o$ 765,000  
1   1,103,000     390,000  
2   906,000     630,000  
3   753,000     396,000  

a.

What is the payback period for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

  Payback period
Dry Prepeg years
Solvent Prepeg years

 

b.

What is the NPV for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

  NPV
Dry Prepeg $
Solvent Prepeg $

c.

What is the IRR for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

  IRR
Dry Prepeg %
Solvent Prepeg %

d.

Calculate the incremental IRR for the cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Incremental IRR %

May 21 2020 View more View Less

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