Mutually exclusive projects

Assignment Help Finance Basics
Reference no: EM131724319

A firm has a WACC of 10% and is deciding between two mutually exclusive projects. Project A has an initial investment of $63. The additional cash flows for project A are: year 1 = $17, year 2 = $35, year 3 = $67. Project B has an initial investment of $73.The cash flows for project B are: year 1 = $51, year 2 = $41, year 3 = $26. Calculate the payback and NPV for each project. (Show all answers to 2 decimals)

Payback for A: 

Payback for B: 

NPV for A: 

NPV for B:

Reference no: EM131724319

Questions Cloud

Calculate the npv for project z : The project is expected to have cash inflows of $20,000 at the end of each year for the next 10 years. The corporation has a WACC of 14%.
Write and analyze the material that he or she is reading : Write and analyze the material that he or she is reading. Your journal should contain complete sentences and be grammatically correct.
What percentage of all men who applied was admitted : A well-known example of Simpson's paradox, published by Bickel, Hammel, and O'Connell (1975), examined admission rates for men and women who had applied.
Create your own professional purpose or mission : Create your own professional purpose or mission. Describe how this purpose differs, or does not differ, from my original purpose?
Mutually exclusive projects : A firm has a WACC of 10% and is deciding between two mutually exclusive projects. Project A has an initial investment of $63.
Identify reasonable entities for the system : Identify relationships one-to-one, one-to-many, or many-to-many using the crow's foot notation described
Why is a vision statement with ideal characteristics : Why is a vision statement with ideal characteristics, rather than ideal interventions allow for more flexibility in how the vision will be accomplished?
What are the flows within a supply chain : What are the flows within a supply chain, and why are they important? What are supply chain coordination and supply chain disruption?
Calculate the npv for project z : The project is expected to have cash inflows of $24,000 at the end of each year for the next 11 years. The corporation has a WACC of 12%.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the net present value of the investment in the

a new furnace for your small factory will cost 4500 a year to install and will require ongoing maintenance

  Compute the break-even point

a. Compute the break-even point. b. Ms. Eaton comes up with a new plan to cut fixed costs to $200,000. However, more labor will now be required, which will increase variable costs per unit to $39. The sales price will remain at $66. What is the n..

  What is comparative advantage and how does it affect

nbspnbspnbsp what is comparative advantage and how does it affect businesses? nbspnbspnbsp what is the difference

  External capital funding proposal

Bring your finance and economics knowledge to bear by preparing an external capital funding proposal for a major international investment at a publicly traded corporation. In order to secure the support of potential financial backers

  What is this firm after-tax marr

The state income tax rate is 3%, and the federal income tax rate is 34%. State income taxes are deductible from federal taxable income. What is this firm's after-tax MARR? (Enter your answer as a percent without the percent sign.)

  Explain which account would earn more money for the investor

Explain which account would earn more money for the investor: a traditional IRA or a Roth IRA. Support your statements with reasons and examples. Describe how people can identify their federal tax brackets

  Dime a dozen diamonds makes synthetic diamonds by treating

dime a dozen diamonds makes synthetic diamonds by treating carbon. each diamond can be sold for 120. the materials cost

  Swaption that matures at time

Compute the initial price of a swaption that matures at time t=5 and has a strike of 0. The underlying swap is the forward-starting swap that begins.

  Explains the probability of the child vision

A couple want to have a child; the woman is a carrier for colorblindness but the man has normal color vision.

  Opportunity cost of capital for type of equipment

The market value today of the current machine is $50,000. Your? company's tax rate is 40%?, and the opportunity cost of capital.

  What happens with the office space

The $3,000 space charge in Matthew's budget is his share (allocated based on relative square feet) of the company's total cost of rent, utilities, and janitorial costs for the administrative office building

  Computing npv if discount rate is given

Briarcrest Condiments is spice-making firm. Newly, it developed new process for producing spices. Compute the NPV if discount rate is 13.74%?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd