a-1. What is the payback period on each project? (Do not round intermediate calculations. Round your answers to the nearest whole number.) Payback Period Project A years Project B Project C years years a-2. What is the discounted payback period on each project? (Do not round intermediate calculations. Round your answers to 2 decimal places. If any of the projects does not pay back on a discounted basis, enter zero ("O").)

a-1. What is the payback period on each project? (Do not round intermediate calculations. Round your answers to the nearest whole number.) Payback Period Project A years Project B Project C years years a-2. What is the discounted payback period on each project? (Do not round intermediate calculations. Round your answers to 2 decimal places. If any of the projects does not pay back on a discounted basis, enter zero ("O").)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Answer the following: 1 What is the payback period on each of the above projects? 2 Given that you wish to use the payback rule with a cutoff period of two years, which projects would you accept? Why? 3 If you use a cutoff period of three years, which projects would you accept? Why?
Using image: a-1. What is the payback period for each project a-2. If you apply the payback criterion, which investment will you choose? b-1. What is the discounted payback period for each project? b-2. If you apply the discounted payback criterion, which investment will you choose? c-1. What is the NPV for each project? c-2. If you apply the NPV criterion, which investment will you choose? d-1. What is the IRR for each project? d-2. If you apply the IRR criterion, which investment will you choose? e-1. What is the profitability index for each project? e-2. If you apply the profitability index criterion, which investment will you choose? f. Based on your answers in (a) through (e), which project will you finally choose?
3) could you use the Figure below that shows the net present value profile of two projects Y and W to answer the following questions: What is the internal rate of return on project Y? Determine the “approximate” discount rate at which you would be indifferent between the two projects Find the “approximate” net present value of project W when the discount rate is 4%.
When comparing two projects with different lives, why do you compute an annuity with an equivalent present value (PV) to the net present value (NPV)? A. so that the projects can be compared on their cost or value created per year B. to reduce the danger that changes in the estimate of the discount rate will lead to choosing the project with a shorter time frame C. so that you can see which project has the greatest net present value (NPV) D. to avoid complications arising from alternating cash inflows and outflows O E. to ensure that cash flows from the project with a longer life that occur after the project with the shorter life has ended are considered
Project A (longer) has higher annualized net benefits than Project B (shorter). !) Does this mean Project A has a higher NPV? 2) Is it always more efficient to choose a project with a higher ANB?
a. They payback period of project A is ___ years (round to two decimal places) The payback period of project B is ____ years. (round to two decimal places) According to the payback method, which project should the firm choose? b. The NPV of project A is $___ The NPV of project B is $___ c. The IRR of project A is ___ The IRR of project B is ___ d. Make a reccomendation
Please help me with this question (picture below) 1. Calculate the payback period, accounting rate of return, net present value of each project. Based on your calculations, discuss whether the projects should go ahead. Assume that the target value for payback is 3 years for project A and 2 years for project B.2. List advantages and disadvantages of payback period, accounting rate of return, net present value of each project.
（i.）If the projects are mutually exclusive and the required rate of return is 7%, which of the projects is chosen by NPV?a. Project Omicronb. Project Upsilonc. Project Omegad. Project Upsilon and Project Omegae. None of the above (ii.)If you use a cut-off period of two years, which of the projects would you accept using the payback period method?a. Project Omicronb. Project Upsilonc. Project Omegad. Project Upsilon and Project Omegae. None of the above
Question Answer 1. If the payback on a project is 3.2 years will the discounted payback be more or will it be less than 3.2 years? 2. If the IRR of a project is 10% will the MIRR be more or will it be less than 10%? 3. What does Payback inform us about the risk of project? 4. What does IRR inform us about the risk of project?
A. Calculate the profitability index for project X. B. Calculate the profitability for project Y C. Using the NPV method combined with the PI aporoach, which project would you select? Use a discount rate of 13 percent
a) the payback period is how many years? b) the project meets/does not eat the benchmark?
Identify the one true statement. a. Compare investment alternatives over a common planning horizon. b. Investment alternatives with unequal planning horizons cannot be compared. c. When the useful lives are not equal, use 10 years as the common time period. d. When the useful lives are not equal, use infinity as the common time period.

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