What is the profitability index for each project

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Reference no: EM131087910

Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$419,000 –$37,000 1 47,000 19,800 2 59,000 13,900 3 76,000 15,600 4 534,000 12,400 The required return on these investments is 11 percent. Required: (a) What is the payback period for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Payback period Project A years Project B years (b) What is the NPV for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Net present value Project A $ Project B $ (c) What is the IRR for each project? (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Internal rate of return Project A % Project B % (d) What is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 3 decimal places (e.g., 32.161).) Profitability index Project A Project B (e) Based on your answers in (a) through (d), which project will you finally choose?

Reference no: EM131087910

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What is the profitability index for each project : Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$419,000 –$37,000 1 47,000 19,800 2 59,000 13,900 3 76,000 15,600 4 534,000 12,400. What is the payback period for each project? What is the NPV for each pro..

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