Which project has the higher npv

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Reference no: EM131884830

1) Consider projects A and B: Cash Flows (dollars) Project C0 C1 C2 NPV at 10% A -34,500 24,600 24,600 + $8,194 B -54,500 37,500 37,500 + 10,583 a. Calculate IRRs for A and B. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Project IRR A % B % b. Which project does the IRR rule suggest is best? Project A Project B c. Which project is really best? Project A Project B

2)Consider projects A and B with the following cash flows:

	C₀				C₁				C₂				C₃
A		-	$	33		+	$	17		+	$	17		+	$	17
B		-		58		+		33		+		33		+		33

a-1. What is the NPV of each project if the discount rate is 10%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

a-2. Which project has the higher NPV?

b-1. What is the profitability index of each project? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b-2. Which project has the higher profitability index?

c-1. Which project is most attractive to a firm that can raise an unlimited amount of funds to pay for its investment projects?

c-2. Which project is most attractive to a firm that is limited in the funds it can raise?

Reference no: EM131884830

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