I need help answer the second part, it goes off of the first question. A busines

Question

I need help answer the second part, it goes off of the first question.

A business is considering whether to proceed with a proposed capital budgeting proposal. The after-tax cash flows for this proposal are: The company's marginal cost of capital is 12%, and the cutoff when using the payback technique is three years. Complete the following table (Partial credit may be possible if you attach your work): What is the value of: a. NPV when a proposal is unacceptable? b. IRR for a proposal that just breaks even? c. The PI when NPV is positive? d. NPV when the IRR is positive? e. PI when the IRR is negative?

Explanation / Answer

2)

a If NPV is negative, Project is unacceptable b Yes, It is the rate at which NPV = $0 c PI will be more than 1 d NPV will be > $0 e PI will be less than 1

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