(Related to Checkpoint 11.1, Checkpoint 11.3, and Checkpoint 11.4) (Net present value, profitability index, and...
70.2K
Verified Solution
Link Copied!
Question
Accounting
(Related to Checkpoint 11.1, Checkpoint 11.3, and Checkpoint 11.4) (Net present value, profitability index, and internal rate of return calculations) You are considering two independent projects, Project A and Project B. The initial cash outlay associated with Project A is $55,000 and the initial cash outlay associated with Project B is $64,000. The discount rate on both projects is 11.4 percent. The expected annual cash flows from each project are as follows: Year Project A Project B 0 $(55,000) S(64.000) 1 11,000 12,000 2 11,000 12.000 3 11,000 12,000 4 11,000 12,000 5 11.000 6 11,000 12,000 (Click on the icon in order to copy its contents into a spreadsheet.) 12,000 Calculate the NPV, PI, and IRR for each project and indicate if the project should be accepted or not. a. The NPV of Project A is $. (Round to the nearest cent.) The NPV of Project Bis $ . (Round to the nearest cent.) b. The Pl of Project Ais . (Round to two decimal places.) The Pl of Project B is (Round to two decimal places.) c. The IRR of Project Ais %. (Round to two decimal places.) The IRR of Project B is%. (Round to two decimal places.) d. Should the projects be accepted or not? (Select the best choice below.)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
