What is the maximum acceptable price to pay for each project

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Project A:

  1. Costs $290,000 and offers seven annual net cash inflows of $57,000. Juda Products requires an annual return of 14% on investments of this nature Project.
  2. Costs $395,000 and offers 10 annual net cash inflows of $70,000. Juda Products demands an annual return of 12% on investments of this nature.

Requirements

Question 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places.

Question 2. What is the maximum acceptable price to pay for each project?

Question 3. What is the profitability index of each project? Round to two decimal places.

Reference no: EM132577570

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