Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

0 359,000 45,500 36,000 23,100 21,100 18,600 3,700 56,000 56,000 431,000 Whichev

ID: 2523477 • Letter: 0

Question

0 359,000 45,500 36,000 23,100 21,100 18,600 3,700 56,000 56,000 431,000 Whichever project you choose, if any, you require a 14 percent return on your investment a-1 What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, o.g, 32.16.) 3.49 years 207 years a-2 If you apply the payback criterion, which investment will you choose? Project A Project B OProject A Project B b-1 What is the discounted payback perlod for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g, 32.16.) Project A Projoct B 3.97 years 2.72 years b-2 if you apply the discounted payback criterion, which investment will you choose? Project A OOProject B -1 What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 docimal places,e.g 32.16) Project A 8,654 o 665 0 s MacBook Air 20 3 2 3 4 5

Explanation / Answer

Profitability index = PV of cash inflow/ initial cash outflow

PIA = (359000 + 8654)/ 359000

       = 1.02

PIB = (45500 + 11665)/ 45500

       = 1.26

--------------------------------------------------------------------------------------------------------------------------

Feel free to comment if you need further assistance J

Pls rate this answer if you found it useful.