Calculate NPV for each project. Round your answer to the nearest cent. Project A
ID: 2776255 • Letter: C
Question
Calculate NPV for each project. Round your answer to the nearest cent. Project A $ Project B $ Calculate IRR for each project. Round your answer to two decimal places. Project A $ Project B $ Calculate MIRR for each project. Round your answer to two decimal places. Project A $ Project B $ Calculate payback for each project. Round your answer to two decimal places. Project A $ Project B $ Calculate discounted payback for each project. Round your answer to two decimal places. Project A $ Project B $ Assuming the projects are independent, which one or ones would you recommend? If the projects are mutually exclusive, which would you recommend?Explanation / Answer
Answer:
To calculate the net present value of a project we should have cash flows + depreciation:
Project A:
Years CAsh flows Present value annuity factor @ 14% Present VAlue
0 -12000 1 -12,000
1-5 4000 3.402 13608
Therefore the Net present value of project A is 13608-12000 = $1608
Prject B:
Years CAsh flows Present value annuity factor @ 14% Present VAlue
0 -36000 1 -36,000
1-5 11,200 3.402 38102
Therefore the Present value of project B is $2102
Therefore Project B should be selected.
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