Relating investment under many capital budgeting techniques

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Reference no: EM1312719

Relating investment under various capital Budgeting Techniques

Consider the following two mutually exclusive projects:

Year	Cash Flow (A)	Cash Flow (B)
0	- $ 262,782	- $27,554
1	27,300	10,410
2	51,000	11,010
3	51,000	10,196
4	393,000	10,971

Whichever project you choose, if any, you require a 15 percent return on your investment.

Required:

(a) The payback period for Projects A and B is _________ and __________ years, respectively, (Round your answer to 2 decimal places, e.g. 32.16)

(b) The discounted payback period for projects A and D is _________ and __________ years respectively, (Round your answer to 2 decimal places, e.g. 32.16)

(c) The NPV for projects A and B is $_________ and $__________ respectively, (Round your answer to 2 decimal places, e.g. 32.16)

(d) The IRR for projects A and B is _________ percent and __________ percent, respectively, (Do not include the percent sign (%). Round your answer to 2 decimal places, e.g. 32.16)

(e) The profitability index for projects A and B is _________ and __________ respectively. (Round your answer to 2 decimal places, e.g. 32.16)

(f) Based on your answers in (a) through (e). You will finally choose project_______

Reference no: EM1312719

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