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- 5. A company wishes to go ahead with one of two mutually exclusive projects, but the profit outcome from each project will depend on the strength of sales demand, as follows. Strong demand Profit $ 80,000 60,000 Project 1 Project 2 Probability of demand 0.2 Moderate demand Profit $ 50,000 25,000 0.4 Weak demand Profit/(Loss) $ (5,000) 10,000 0.4Suppose now that we have a multi-period project. The project costs $100,000 Perlodi Perlod2 Perlod3 CF1 pl CF2 pl CF3 pl 23797.53 0.4 33226.74 0.3 24246.54 0.1 47595.06 0.5 66453.48 0.6 48493.08 0.7 71392.59 0.1 99680.22 0.1 72739.62 0.2 1/ Find the E(CF1), E(CF2) and E(CF3) 2/ Find the V(CF1), V(CF2) and V(CF3) 3/ IF the requlred rate of return Is 9% then 3-1 Find E(NPV) 3-2 Find V(NPV) if we consider Independence Between the Cash Flows 3-3 Find the o(NPV) if we consider total dependence Between the Cash Flows. 3-4 Find the probability that the NPV of the project is less than to zero the if we consider total dependence Between the Cash FlowsSuppose that you could invest in the following projects but have only $24,480 to invest. Which projects would you choose? Project Cost NPV w $ 7,970 $ 3,000 x 10,990 7,530 y 8,500 4,280 z 6,750 3,890 You should invest in project(s)?
- Suppose that you could invest in the following projects but have only $29,700 to invest. How would you make your decision and in which projects would you invest? Project Cost A $7,850 B C D 11,060 9,200 6,540 NPV $3,200 6,460 4,150 3,090 You should invest in project(s)Consider the following two mutually exclusive projects: Year Cash Flow(A) -$ 63,000 39,000 33,000 22,500 14,600 Cash Flow(B) -$ 63,000 25,700 29,700 35,000 24,700 4 1-What is the IRR for each project? Project A Project B % % 2.IF you apply the IRR decision rule, which project should ti 3.Assume the required return is 14 percent. What is the NP Project A Project B 0123The net present value of four projects is given below: Project W: $24,000 Project X: $ 11,000 Project Y: $20,000 Project Z: $14,000 The four projects given above require the same amount of investment. How would you rank them using net present value (NPV) method? Group of answer choices X, Z, Y, W W, X, Y, Z W, Y, Z, XX, Y, Z, W
- Suppose that you could invest in the following projects but have only $29,670 to invest. How would you make your decision and in which projects would you invest? Project Cost NPV A $8,260 $4,300 BCD 10,850 6,470 9,070 4,830 7,170 3,940 You should invest in project(s) E6. The following graph shows the NPV of a project as a function of the cost of capital. Your actual cost of capital is 12%. a. What is the IRR of the project? b. Should you take the project? Explain. Net Present Value 150,000 100,000 50,000 0% 10% 20% 30% 40% (50,000) (100,000) Cost of Capital I 50%Wallace Company is considering two projects. Their required rate of return is 10%. Which of the two projects, A or B, is better in terms of internal rate of return?
- Consider the following two mutually exclusive projects. Time Project A Project B 0 -$300 -$405 1 -$387 $134 2 -$193 $134 3 $100 $134 4 $600 $134 5 $600 $134 6 $850 $150 7 $180 $284 What is each project’s payback, discounted payback, IRR, and NPV with a cost of capital of 12%? Which project should be selected?13. I need help with finance home work question asap please What is the profitability index for a project that requires an initial cash outflow in the amount of $5,000,000 and has a NPV of $750,000?The NPV of a project is $8,000. If the IRR is 12%, which of the following is the required rate of return for the project? Group of answer choices A.12.00% B.none of these are possible answers C.15.97% D.11.75%