Problem 10-10
Capital Budgeting Methods
Project S has a cost of $9,000 and is expected to produce
benefits...
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Finance
Problem 10-10 Capital Budgeting Methods
Project S has a cost of $9,000 and is expected to producebenefits (cash flows) of $2,700 per year for 5 years. Project Lcosts $26,000 and is expected to produce cash flows of $7,100 peryear for 5 years.
Calculate the two projects' NPVs, assuming a cost of capital of10%. Round your answers to the nearest cent.
Project S
$Â Â Â Â
Project L
$Â Â Â Â
Which project would be selected, assuming they are mutuallyexclusive? -Select-Project SProject LItem 3
Calculate the two projects' IRRs. Round your answers to twodecimal places.
Project S
%
Project L
%
Which project would be selected, assuming they are mutuallyexclusive? -Select-Project SProject LItem 6
Calculate the two projects' MIRRs, assuming a cost of capital of10%. Round your answers to two decimal places.
Project S
%
Project L
%
Which project would be selected, assuming they are mutuallyexclusive? -Select-Project SProject LItem 9
Calculate the two projects' PIs, assuming a cost of capital of10%. Round your answers to two decimal places.
Project S
   Â
Project L
   Â
Which project would be selected, assuming they are mutuallyexclusive? -Select-Project SProject LItem 12
Which project should actually be selected? -Select-Project SProject LItem 13
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